Oral Answers to Questions

Debate between Mike Penning and Kate Green

Tuesday 3rd February 2015 Commons Chamber

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

13. What steps his Department is taking to encourage people to become magistrates and to train new magistrates.

[The Minister for Policing, Criminal Justice and Victims (Mike Penning)]

I will just “boing” again, Mr Speaker. The role of a magistrate is already a sought-after role in our communities and competition for vacancies is very strong.

[Kate Green]

I declare an interest as a life member of the Magistrates’ Association, which has expressed concern to me about the new provisions of the Offender Rehabilitation Act 2014, which came into force this week in relation to the new activity requirements. The association says that it has been inundated with queries from magistrates about these new provisions. Will the Minister tell us what detailed training has been given to magistrates?

[Mike Penning]

There is a substantial and comprehensive training programme, which is under the overall supervision of the Judicial College. I will write to the hon. Lady giving a full and detailed answer—or, rather, the Minister responsible will.

Oral Answers to Questions

Debate between Mike Penning and Kate Green

Monday 23rd June 2014 Commons Chamber

[Mike Penning]

One of the things we are trying to do is communicate much better with people who are waiting, which is the most important thing we can do. What we do not want to do is build up promises, so that people think they will be assessed quicker than they will be. On PIP in particular, we will make sure that the providers are doing the job we are asking them to do, and that we are acting as fast as we can and taking the correct decisions. On the first point, I cannot give a time scale at this time, and it would be wrong for any Minister to stand before the House and do so.

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

The Government did not bother to pilot PIP properly, Atos made misleading statements in its bid, Ministers have presided over a 42-year backlog in cases, and each decision costs £1,500—more than the benefit of some £1,120 that many receive. Reassessments have had to be postponed while sick and disabled people wait for a decision, including cancer patients, who according to Macmillan are experiencing anxiety, financial worries and worsening health. Is it not time that the Minister acknowledged that it is another catalogue of DWP chaos and that the £1 billion savings promised by 2015 will not be achieved, while sick and disabled people are living with the worry and hardship that he has caused?

[Mike Penning]

I do not accept many of the points that the hon. Lady makes, but what I do accept is that it is unacceptable for people who are in desperate need to wait, which is why I acted with Macmillan really fast to bring the time down from 28 days to inside 10 days for people with terminal illness. We are now looking at the other cases and working with as many of the charity and other groups as we can to make sure that we get the figure down. If they work with us, we can work on this together. The Opposition keep moaning about the policy, but the previous Administration left people on the disability living allowance for years, with only 7% of them ever having a face-to-face assessment. That was an appalling situation.

Payment Scheme (Mesothelioma)

Debate between Mike Penning and Kate Green

Monday 17th March 2014 Commons Chamber

[Mike Penning]

I will write to the hon. Gentleman with that information. We debated the matter at length at each stage of the Bill, and I reiterate that the key is to stick within the 3% agreement, which is not being passed on to new business. The House agreed when we debated the subject that to pass on costs to new business would be improper.

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

While we are on the subject, does the Minister accept that, as we discussed in the Mesothelioma Bill Committee, even if we maintained the levy at 3%, the Government’s impact assessment makes it clear that after four years it would at least be possible to raise payments to 90%?

[Mike Penning]

We looked at that extensively in Committee, but those figures are all based on assessments. When the four-year review comes up, we will look carefully to see what is in the pot, but it would be irresponsible of me or any Minister to stand before the House and commit to emptying the pot completely by going even further. By moving to 80% I have moved as far as I can, and a lot further than many wanted me to move. I promised to increase payment levels if I could, and I have done so.

--- Later in debate ---

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

I am very pleased to see the progress that has been made on the introduction of the scheme and, at risk of doing further damage to the Minister’s reputation, I should like to join colleagues from across the House in congratulating him on taking this further step towards ultimately, we hope, securing full justice for mesothelioma victims. I want to take this opportunity to pay tribute again to the many campaigners involved, especially the victim support groups and trade unionists, and to acknowledge that the uplift in the level of payments was pressed for in both Houses of Parliament and across all parties. I am grateful to the Minister for highlighting the contribution of our much-missed colleague and friend, Paul Goggins.

We are all pleased that the Minister has been able to bring this increase to the House. I note that he intends to achieve the increase in payments through negative regulations to be tabled immediately after the regulations before us come into force. On that basis, we are entirely happy to accept the motion before us tonight, although it is clear that the amount of scheme payments in schedule 4 do not represent the level of payments that we now expect to be made.

The Minister said that he had been able to achieve the increase in payments because of savings made on the administration costs. He will recall that I suggested doing exactly that in Committee on 12 March 2013, so I am pleased that he has been able to take up my suggestion. Will he give us a little more information about exactly where the savings have been found? We have discussed this before in Committee. The Government’s impact assessment told us last November that an uplift in payments from 75% to 80% of average civil damages would cost an additional £11 million in the first four years of the scheme, and an additional £22 million over the first 10 years of the scheme. It also stated that, with the payments set at 75%:

“The costs of the scheme are split between a levy of £371m on the insurance industry and £17m in government funding. This covers scheme payments direct to individuals (£261.4m), benefit recovery (£72.2m), applicant legal fees (£24.6m) and admin of £30.0m (including case legal fees of £24.2m, set up of £1.4m and running costs of £4.4m).”

The Minister will recall our extensive discussions in Committee about the detail of those admin costs, and about the legal fees within them. As the impact assessment shows, there are two sets of legal fees involved: applicants’ fees, at £24.6 million, and case legal fees, at £24.2 million. However, despite extensive discussion in Public Bill Committee—and despite what he has said tonight, which is reassuring—I am still unclear about the respective levels and purpose of the two sets of legal fees.

Claimants’ legal fees were set at £7,000 per case when the legislation was first introduced in the House of Lords, when payment was set at 70% of average civil damages. During the passage of the Bill through the House of Lords, the legal fees were reduced to £2,000 per case and payments increased to 75%. I think we understood that to be a quid pro quo. But later, during the Committee stage in the Commons, legal fees reverted to £7,000. The Minister told us that he had had discussions with the Association of Personal Injury Lawyers and felt £7,000 to be a reasonable figure after all. However, he also said that if cases could be conducted more cheaply, applicants would none the less receive the full £7,000. He has confirmed that again this evening, which we welcome. That did not cut much ice with the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) in Committee. As a lawyer himself, he might be assumed to have some insight into lawyers’ thought processes in these matters. He suggested that if £7,000 was the assumed rate for the job, that would de facto become the tariff, whether it accurately reflected lawyers’ costs or not.

Now the Minister tells us that extra moneys have been squeezed out of the admin costs to fund a further, and very welcome, uplift in payments. Can he tell us exactly where it has come from? He has placed on record that £7,000 per head remains the sum allocated to applicants for their legal fees, and that if their actual fees fall short of that amount, they will receive the difference, in cash, up to £7,000. If there are no changes in the position in relation to applicants’ legal fees, can he tell us where he has found the additional £11 million, or £22 million, necessary to pay for the uplift in payments to 80%?

On the face of it, the extra money must come from a combination of the other admin costs. Will the Minister tell us what he now assesses the running costs and set-up costs of the scheme to be? Have those costs decreased since the impact assessment was conducted? If so, will he tell us by how much, and how that was achieved? Will he tell us how much is now allocated for case legal fees, as opposed to applicant legal fees? I am still struggling to understand what these encompass, but the Minister assured us in Committee that they would be incurred for the benefit of claimants. Will he therefore tell us whether the sum of £24.2 million in the impact assessment has now been reduced, and if so, by how much? What effect will that have on the handling of cases, and what impact will it have on claimants?

Will the Minister tell us whether the contract with Gallagher Bassett International, which is to administer the scheme, includes a profit element? I assume that it does. If so, is it included in the running costs? If the additional funds to meet payments at 80% have been found elsewhere, rather than from the costs I have just mentioned, will he tell us exactly where we should look? He has just told us that the levy on the insurance industry would remain at 3%. I had hoped that the Government’s commitment to maintain it at 3% would appear in the regulations, but it has not done so. Will he tell us whether payment at 80% remains affordable within a levy of 3%, during and beyond the first four years of the scheme?

[Mike Penning]

We have always tried to have a consensus, and I thought the shadow Minister knew that that was exactly what I had said. That is exactly what is going to happen, and I do not know why she is going over this old ground again. We went through all this in Committee, and she seems to be reiterating the arguments that she made at that time. We are talking about the regulations that are now before us, and we need to get through this tonight so that the compensation can be paid.

[Kate Green]

I am simply trying to understand where the additional £11 million has been found. It would be helpful if we knew that. We are particularly anxious that this should not have a detrimental effect on the way in which the scheme works for claimants. I know that the Minister does not want that to happen, but it would be helpful to understand how he can give us an assurance that it will not.

On some of the other aspects of the scheme, regulation 5 sets out the general duties of the scheme administrator, including a duty to take reasonable steps to publicise the scheme. Now that the administrator has been appointed, will the Minister tell us more about how that will be achieved? What discussions have taken place with the administrator to ensure the widest possible dissemination of information about the scheme to those who might have a claim under it, and what discussions are taking place with trade unions, victims’ groups and others to ensure the widest possible promotion of the scheme? Have health care professionals in the NHS been alerted to it, and will there be clear signposting to the application process?

I was pleased to hear the Minister say a moment ago that he expected applications to be accepted with effect from 6 April. However, there is nothing on the Department for Work and Pensions website explaining how people should make an application—or at least, there was no such information there two or three hours ago, when I last checked. The Minister will understand the importance of making that information available very quickly, given the poor prognosis of the disease. Will he tell us when he expects the application form to be available, and how claimants will be able to access it?

Regulation 5(4) requires the scheme administrator to ensure that there are sufficient numbers of suitably qualified persons to determine applications under the scheme. Will the Minister tell us more about the likely professional background and qualifications of those persons, and in particular about their independence and how they will be employed? Will they be employees of the scheme administrator, or might they work on a freelance basis? Is it possible that they could have a conflict of interest if they held other appointments or roles within the insurance industry at the same time? How would such conflicts be identified and dealt with, and how will the public and claimants be reassured of the independence of those employed to take decisions in the scheme?

I welcome the provisions in regulation 9 on time limits for applications. The Minister has made good on his assurance in Committee that applicants would have three years from the date of diagnosis or three years from when the regulations come into force if diagnosis is after 25 July 2012 but before they come into effect. However, there are concerns about time limits when we look at regulation 18.

Generally, if a claimant dies before the case is determined, a payment may be made to his or her personal representative in the event that they leave no dependants. This will, however, still leave a small group of mesothelioma sufferers without dependants who were diagnosed on or after 25 July 2012, but who died before they could make an application, for example because the forms were not available. In those cases, it is my understanding that no payment will be made to the deceased’s personal representative. That seems unjust. It has been clear in all our discussions that the Government’s firm intention is for claims to be met for anyone with a diagnosis after 25 July 2012, and it cannot be right that a small group, who otherwise would qualify, should be excluded. Will the Minister say what he intends to do to address that situation?

I welcome regulation 11, which sets time limits for the provision of additional information. That was a suggestion made by my noble Friend Lord Browne, in discussion with the Minister’s officials. I am very pleased that it has been taken on board. I must emphasise my continuing concern, however, that where information is needed from Her Majesty’s Revenue and Customs—a situation I raised in Committee and on Report—the problem of HMRC insisting on a court order to release the employment records of deceased claimants remains totally unresolved. This is a very serious matter, as it risks building in delay and costs for claimants accessing the scheme. On Report, the Minister assured the House that a suitable vehicle for dealing with this problem would be found in good time for the establishment of the scheme, and I recall that he responded positively to the suggestion of the hon. Member for Gainsborough (Sir Edward Leigh) that it could be dealt with in secondary legislation. There is, however, no sign of any such provision in the regulations before us. Indeed, as recently as 25 February, I received a letter from the Exchequer Secretary to the Treasury which suggests that the Government have made absolutely no progress whatever on the matter since we discussed it at the beginning of January. That is really concerning, given the imminent launch of the scheme. I hope the Minister will be able to update us on what urgent action the Government are taking.

I welcome the provision in regulation 18, which provides for the applicant to request a review of a determination—another of Lord Browne’s suggestions. I also welcome regulation 24, which adopts the suggestion of the hon. and learned Member for Sleaford and North Hykeham that in conducting a review, the administrator must ensure that anyone who had responsibility for the original determination will play no role in the consideration of that review.

I am disappointed that schedule 2 continues to include eligibility for payments under the Turner and Newall schemes as grounds for exclusion from access to this scheme. As the Minister knows from our discussion in Committee, this will leave a number of people considerably worse off than if they had been able to access this scheme. I had hoped he would have wanted to be as generous as possible to those sufferers, and I regret that he has not been able to do that.

Finally, may I ask the Minister to say a little more on a discussion that took place a few moments ago in relation to the review of the scheme? I welcome the commitment in regulation 27 to annual review of these regulations, but will he be absolutely clear that in addition there will be a full review of the scheme after four years? In Committee, he told us:

“It is very important that the insurance companies know that the 3% is there. In Committee in the other place, Lord Freud committed to a review at the end of the smoothing period, after four years, to see exactly how things were going…I will place that fact in regulations so that the Committee has confidence that a review will take place after the four-year smoothing period. At that point, we will have a much better idea of how much the levy collector is collecting. We may be able to spend that by increasing the percentage, or we may be able to do other things with it.”––[Official Report, Mesothelioma [Lords] Public Bill Committee, 10 December 2013; c. 77-8.]

That is important, since by my calculation an even more generous level of payment—at least 90% of average civil compensation—could be affordable within the proposed 3% levy after the first four years of the scheme. I had hoped the regulations would specifically provide for a four-year review to take place, but they do not. Will the Minister say why they do not and what his intentions are in that regard?

Let me sum up as follows: we warmly welcome the progress that has been made towards the establishment of the diffuse mesothelioma payments scheme and we certainly have no intention of delaying or opposing the regulations, but there remain a number of outstanding issues. I hope the Minister will be able to respond and offer further reassurance on them.

--- Later in debate ---

[Mike Penning]

The motion is not carried. I appreciate that my hon. and gallant Friend has not been with us for all the debates on this, but I am afraid that that is not the case. This is a scheme of last resort. In most cases, people who get this abhorrent, horrible and preventable disease will be able to claim from their employer and thus their employer’s insurance. Employer’s liability insurance is compulsory. The stakeholder groups and the trade unions have been excellent over the years. I pay tribute not only to them but to Members across the House for representing people with mesothelioma, because it is a horrible and terminal disease. The employers who put those people into this position should be liable. This has to be a scheme of last resort.

[Kate Green]

Can the Minister say what progress he and the Government are making in order to obtain employers’ records from HMRC? He is right that most people will be able to make a claim against an employer, but they will need to be able to obtain those records to do so.

[Mike Penning]

The hon. Lady is absolutely correct, and we are still working with HMRC to ensure that that happens. If necessary, we will introduce legislation. However, at the moment, the Data Protection Act prevents us from doing that. I explained that in Committee. I am sure that that was never the intention, but it is one of the restrictions that the Treasury lawyers have had to look at.

I want to deal with a couple of issues quickly because I do not want to delay the House. Should beneficiaries of someone who qualifies under the scheme—not dependants or loved ones—get a payment? The answer is that they will not, because the scheme is designed specifically for the sufferers of this terrible disease, their loved ones and their dependants to allow them to get on with their lives.

On the £7,000 payment, we will look enormously closely with the Association of Personal Injury Lawyers, our own lawyers and the Ministry of Justice to ensure that no rip-offs take place.

Welfare Reform (Sick and Disabled People)

Debate between Mike Penning and Kate Green

Thursday 27th February 2014 Commons Chamber

[Mike Penning]

I want to make some progress, but I promise that I will give way to the hon. Lady in a moment.

[Kate Green]

Will the Minister give way?

[Mike Penning]

I want to make a little more progress on this point.

The National Audit Office report has been mentioned today. It was a snapshot report based on the situation in the autumn of last year. When I appeared before the Select Committee, I spoke extensively about one aspect of the report, which dealt with terminal illness. It is crucial to understand that I hid nothing away from the Committee, and that I said that the length of time involved in dealing with those cases was unacceptable. It has now come down to about 10 days. That is still too long, although it is less than it was under the previous scheme. We will get it down even further. I am working closely with Macmillan, and we have agreed to pilot a scheme for the 2% of terminal cases in which we will return to a paper-based system until I can get a secure PDF into place. Macmillan is pleased with what we are doing on that. The system is still not perfect, but we have moved an awfully long way, and we learned a lot of the lessons before the report even came out.

[Kate Green]

My point is on the WCA, and I hope that the Minister will address the question that I and my hon. Friend the Member for Edinburgh East (Sheila Gilmore) raised about the suspension of reassessment of ESA claimants for the next two years. Will he tell us why the Department appears to have decided not to inform claimants or Members of Parliament about that?

[Mike Penning]

If we were to inform claimants and Members of Parliament about the minutiae of every single change in policy, we would be here a lot longer. As most Members know, I am not hugely party political, but I must point out that the previous Administration did not offer that level of information either. That is not how Governments work. We are trying to deal with the delays, and to ensure that people get what they are entitled to as quickly as possible and that nobody will be worse off while we are doing that. We are, however, in the middle of a really difficult negotiation with Atos over the WCA.

I want to talk about how we can speed things up. Yesterday, I chaired a meeting of a network involving all the major stakeholders and charities. I hope that I will not upset any of the charities by leaving them out. It was a positive meeting, at which I said to them, “Sit with us and work with us to help us improve on what we have.” I was very much in listening mode, which is why I shall now give way to the hon. Member for Bolton South East (Yasmin Qureshi).

Oral Answers to Questions

Debate between Mike Penning and Kate Green

Monday 24th February 2014 Commons Chamber

[Mike Penning]

We often hear about the negative side of PIP, and we have heard again from the Opposition today about their opposition to some parts of it, but there is a great success story for people with mental health issues. Under the old DLA system, they would not be able to get the higher rate that they will receive under PIP, which should be welcomed across the House.

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

Last year, there were 229,700 claims for PIP, but decisions were taken on only 43,800—fewer than one in five. How can it be right to take up to six months to reach a decision of such significance for severely disabled people? Has the Minister actually set a target for timely decisions, and what penalties will he impose on the assessors—Capita and Atos—for failing to meet it?

[Mike Penning]

It is always difficult to ask a question that has been written before hearing the previous answers. We accept that there are delays: we accept that within PIP, and we accept that within Atos and Capita. We are working closely with them to deal with that. Under the previous system, less than 6% of people ever had a face-to-face assessment; now it is 97%, which we should welcome. We need to get that down so that we can address paper claims quicker, particularly in cases of terminal illness, which we are working on. However, we must push this forward.

Oral Answers to Questions

Debate between Mike Penning and Kate Green

Monday 13th January 2014 Commons Chamber

[Mike Penning]

The reason we are spending so much money is that we want to ensure that people with disabilities or other long-term conditions can lead lives that are as fulfilling as possible, and, if they are able to do so, enter the workplace. Much of the money is spent on the Access to Work scheme, which has proved very successful. It is interesting that not many Opposition Members seem to approve of the £50 billion that the Government are spending.

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

Ministers have been taking a pick-and-mix approach to the OECD figures, claiming that the United Kingdom is a top spender on disability-related benefits while referring to only one indicator rather than to total incapacity-related benefit spending. Is it not time that they came clean? Will the Minister now admit that disabled people are bearing the brunt of the Government’s welfare reforms?

[Mike Penning]

We do not “pick and mix” at all. Those who look carefully at the figures will see that Germany spends roughly half the amount that we spend in relation to GDP. If the hon. Lady thinks that we should spend more, that will mean another spending commitment from the Opposition.

Mesothelioma Bill [Lords]

Debate between Mike Penning and Kate Green

Tuesday 7th January 2014 Commons Chamber

[The Minister of State, Department for Work and Pensions (Mike Penning)]

I thank you, Madam Deputy Speaker, and Mr Speaker, who is now back in the Chair, for permission to make some opening remarks at the start of Report. While I am enormously proud to bring this important and long-awaited Bill before the House, it is with a sad heart that I do so without the presence of the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who has campaigned for this Bill for many years. Although we may not have agreed fully on all parts of the Bill—we will come on to those parts later—he was enormously helpful to me, not only in the Bill Committee of which he was a member, but outside the House. When I first became a Minister he was very open, and discussed with me the sort of pressures and worries that I would be having. It is a real shame he is not here today, and our thoughts and prayers are with him and his family. We wish him a speedy recovery. I know that he is very poorly, but I know that the thoughts and prayers of both sides of the House go out to him today, and I hope that we will do him proud with the Bill today.

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

I thank the Minister for the remarks that he made about my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). He is a good friend and colleague to Members on both sides of the House. He is my parliamentary next-door neighbour and, as the Minister has said, for those who are new in this place or to a role, my right hon. Friend is a tremendous source of support, guidance, help and friendship. We miss him very much today.

I am delighted that some of the amendments that my right hon. Friend was able to table before he became unwell will be debated this afternoon, and I hope that the Minister and others will want to do all that they can to honour Paul’s intentions. I know from my right hon. Friend the Member for Leigh (Andy Burnham), who has been in touch with Paul’s family, that they are hugely appreciative that we have the opportunity to debate these amendments this afternoon, and that can be the best tribute to Paul to wish him a full recovery so that we have him back with us as soon as possible.

--- Later in debate ---

[Kate Green]

I am shocked to hear of the case that my hon. Friend reports. For anyone suffering terribly from a disease they know will be fatal and cruel in its passage, one of the most important things is being as close as possible to home, to their family and friends, and naturally we want to do all we can to invest in good-quality, well-researched treatment so that every mesothelioma sufferer can access care as close as possible to home.

Members across the House have pointed out the differential in the level of funding afforded to mesothelioma research relative to that directed to other medical conditions and other cancers. In fact, mesothelioma research receives no state funding at all, yet as more people access pay-outs from the scheme introduced in the Bill, the Government should begin to enjoy financial savings as a result of reduced statutory pay-outs. It is not one of the amendments proposed today, but the Minister might like to consider whether the savings that the Government can look forward to enjoying might also, to a degree, be directed towards funding further research into a treatment and cure for this terrible disease.

Today, mesothelioma research receives £1.4 million of entirely voluntary and private sector funding, and I pay tribute to the voluntary and private sector funders, including the insurance funders, that have made those research funds available. Some £1.4 million is available to mesothelioma each year, compared with, for example, £22 million for bowel cancer, £41 million for breast cancer, £11.5 million for lung cancer and £32 million for leukaemia. Clearly we are not anxious to be in some form of league table for which form of cancer is the most deserving of funding for research—all are terrible for those hit by them and for those close to them—but it is clear that mesothelioma is a poor relation in the funding that is available for research, and there is a real will across the House and, as we know, in the other place to address that matter during the passage of the Bill.

This issue was debated extensively in the House of Lords as a result of an amendment tabled by Lord Alton. At that time, a number of useful and welcome pledges were secured from the Health Minister, Earl Howe, including the announcement of a joint strategy between the DWP and the Department of Health on how to encourage proposals for high-quality research into mesothelioma. Since Earl Howe’s statement in the House of Lords, we have heard that a meeting has been hosted with potential researchers and funders to begin to take forward the implementation of that strategy. We are pleased to hear that.

As the Minister will recall, when we debated the matter in Committee my right hon. Friend the Member for Wythenshawe and Sale East absolutely rejected any suggestions that it was a lack of suitable research proposals, rather than a lack of adequate research funding, that was leading to the dearth of activity in mesothelioma research. The proposal in the new clause, which was made at every stage in Committee and in the other place, is very modest in the context of the overall scheme that we are discussing. It proposes a supplement of 1% to go towards research funding on the levy on insurers. That is not 1% of gross written premium, but 1% of 3% of gross written premium—a very modest sum for a multibillion pound insurance industry to afford, but a sum that could make an exponential difference to the scale of research that is possible into the disease. I hope that the Minister is listening carefully to the pleas that we should secure that.

In Committee, my right hon. Friend the Member for Wythenshawe and Sale East listed a series of research programmes that are already under way; the hon. Member for Chatham and Aylesford also referred to those programmes. We would like to take the opportunity to secure funding to extend, expand and continue those research programmes, and to open the opportunity for further new areas of research—as I say, there is no shortage of good research ideas.

It is important to note that such research would of course be of benefit to mesothelioma sufferers in this country. We have the highest incidence of mesothelioma anywhere in the world and, as hon. Members have pointed out, the reach of mesothelioma is extending; not just to those who worked in our traditional industrial sectors but across other sectors. Schools have been particularly highlighted, as have family members who may have been exposed to secondary contamination when workers brought home asbestos fibres on clothes and work equipment.

Not just sufferers and their families here in the UK but sufferers right across the world will benefit from investment in research. That is an important point, and one that my right hon. Friend the Member for Wythenshawe and Sale East would have wanted us to consider this afternoon. In the UK, we think that we are shortly to pass the spike in mesothelioma. The history of asbestos exposure and of health and safety action and legislation to prevent people from being continually exposed to that risk means that the spike in the number of sufferers will come within the next few years. That is to be welcomed tremendously here in the UK, but it is absolutely not the case around the world, particularly in developing economies—especially developing economies where health and safety standards may be much less rigorous than we are used to in this country and where economies may be expanding very rapidly—where hundreds of thousands, if not millions, of workers may even now be exposed to the risk of mesothelioma despite all the collective knowledge and wisdom that we have of the damage that exposure to asbestos will cause.

It is also important to note that in many of those developing economies, UK companies and businesses will have business interests and investments. In some cases they may be drawing profits from industries that are continuing to expose workers worldwide to that risk. The moral obligation on us here in the UK to lead the world in research funding arises first because of our early experience of asbestos exposure and mesothelioma and secondly because we continue indirectly to be complicit in the exposure of workers in developing economies around the world.

It has been powerfully conveyed this afternoon how strongly the House feels not just about making sure that the funding proposals come forward, but that funding to support and encourage future proposals is guaranteed and secured. I know that the insurance industry feels as concerned as any of us to address the horrors of this disease and to seek to turn a corner in dealing with the risks to which we have exposed too many generations. I hope that it too will consider this very modest proposal, which merely builds on the voluntary contribution that many of them are already making. I hope that the industry will not feel that this is a step too far for it to contemplate. Even if it does feel that, it is the responsibility of those of us in this House first and foremost to speak up for victims—today’s victims and victims in the future. That is why I hope that the Minister will at last feel able to accept the amendments that have been moved on behalf of my right hon. Friend. I very much look forward to a positive response.

[Mike Penning]

I paid tribute to the right hon. Member for Wythenshawe and Sale East (Paul Goggins) earlier. When I heard the news, I e-mailed his office, as that was the only way I could contact his family. I hope that the message got through. It is not just in my current post that the right hon. Gentleman has been supportive; he was also supportive when I was a Northern Ireland Minister. He was an excellent Minister there as well. I pay tribute to the measured response from Her Majesty’s Opposition so far today and I am sure that that will continue. I particularly pay tribute to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on what must have been a difficult speech to make. The right hon. Gentleman, who is very poorly, is a close friend; we are friends across the House. It is a tribute to my hon. Friend that she was able to move the amendments today.

During the Committee stage, I gave undertakings to the right hon. Member for Wythenshawe and Sale East—inside and outside the Committee—and discussed the restraints I was under, which he fully understood, given the deal that we struck with the insurance industry to get the Bill to where it is today. As promised, I met the ABI, to which my hon. Friend the Member for Chatham and Aylesford Urmston (Kate Green) alluded, and the ABI has gone to the industry and will come back to me and to my noble friend Lord Howe as part of the joint approach that we have with the Department of Health on future research.

I have also spoken to Lord Howe, as I committed to do in Committee. As has been said, we have had the first meeting. One of the things I touched on with him was the issue of quality of research. That matter has been taken out of context slightly, although there was no intention to do so. It is like when anyone bids for anything; they have to tick the right boxes. When people go for a loan at the bank, they need to make sure that they have ticked the right boxes. It is not a question of the quality of research; in many cases, it is how that research has been bid for by the establishments.

It is true that the National Institute for Health Research provided £2.2 million in 2012-13 on top of the £1.4 million from the private sector. There has been money and we expect more money to come as bids come forward that match the way in which the research funding is allocated. I completely agree with the shadow Minister that we need to look at research not just in this country, as a developed nation, but for developing countries. A lot of the industries that developed products with asbestos in them have been selling them to the third world for many years. Thank goodness, many of the nations that we traditionally thought of as third-world nations are now developing nations, and it is important to force this issue forward.

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[Kate Green]

I rise to speak to amendment 9 in my name and to support all the other amendments in this group. Amendment 9 seeks to enshrine in the Bill the 3% of gross written premium, which is the levy to be imposed on insurance companies to fund the mesothelioma payment scheme.

What I want from this amendment is a cast-iron guarantee that that levy will remain in place as long as the scheme continues. I am sure that the Minister feels that he has already given me that guarantee on at least one occasion—if not on many occasions. For example, he gave it in Committee on 10 December.

[Mike Penning]

May I reiterate the guarantee that I gave the hon. Lady in Committee and again today that it will stay at 3%?

[Kate Green]

I am grateful for that further assurance. On 10 December, the Minister said that 3% “is not going anywhere”. On 12 December, he said:

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

He has given us a further assurance this afternoon. He was a wee bit more equivocal, if he will forgive me for saying so, in his letter to Committee members on 17 December, where he said:

“We will look to ensure that the rate of the levy continues to be 3% of GWP...or equivalent to 100% of average civil damages.”

I am particularly concerned about this, because the Government’s impact assessment says that the levy will raise £371 million over 10 years, but I have subsequently learned from the economist at the Department for Work and Pensions that its modelling to arrive at that figure is based not on 3% “not going anywhere” but on how much it costs to meet pay-outs at 75% of average civil damages and the associated costs. In fact, the figure of £367 million in the impact assessment, which is what the Government have been relying on as the cost of the scheme that they say is affordable to the industry, means that the industry will face a levy of just 2.46% over 10 years. I know that the Minister has assured us that there will be a review after four years of the operation of the scheme of the amount the levy has raised and what can be done to increase the rate of payments beyond 75%. Indeed, the Minister has said to me that there might be other things that can be done, too.

If the industry can afford 3% today, it can afford 3% over the lifetime of the scheme. If the rate were maintained at 3% over the first 10 years of the scheme, it would raise £452 million rather than £371 million. That would be a further £81 million for sufferers that the industry is telling us it can afford. Indeed, the industry thinks that the scheme will run for 30 or 40 years and talks about there being a cost of £30 million to £35 million a year, or £1.2 billion to £1.4 billion over the whole period of the scheme. The cost of 100% payouts going back to 1968 will be £1.1 billion, so 3% would allow us a much earlier start date and to increase the rate while leaving some money over for research or to cover other diseases.

It seems to me that there is plenty of scope to enshrine the level of 3% in legislation. The industry can afford to pay it and we have no reason to believe that it cannot or will not be able to afford it in the future. The industry says that that is an acceptable levy that would put more money into the scheme, if not immediately then in subsequent years. The industry will face the levy during the first four years of the scheme, so we are not asking for any extra money during those years. I cannot understand why that levy cannot be enshrined in the Bill today.

I strongly support amendment 5 on the start date, proposed by my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), for exactly the reason given, for example, by my hon. Friend the Member for Wansbeck (Ian Lavery)—the guilty knowledge which backdates, even on the most modest reading, to at least February 2010 when the Labour Government launched the most recent consultation. I would argue that since that date the industry has been on notice that there will be a scheme, and one for which it will have to pay.

The Minister says that one option in the consultation was to do nothing, and that might be true. Consultation documents always contain a do nothing option, but that rarely suggests that nothing will transpire. I do not think that the Government of the day, this Government or insurers have thought that doing nothing was the option on the table. Labour’s consultation document specifically said that Ministers were

“persuaded that an Employers’ Liability Insurance Bureau…should form part of the package”

creating a compensator of last resort. The industry has been planning for a scheme based on market share of employers’ liability insurance, either historic or current. In its response to the Labour consultation, the industry concentrated on only two costed models and made it quite clear that that was the basis on which it expected the scheme to proceed.

It has been noted, although I think some of my colleagues were rather sceptical about the figure, that backdating to 2010 could increase costs by £80 million over 10 years. I think that figure is acceptable and understand why the Government have suggested it. We will see an early spike in claims during the first few years of the scheme and in later years, of course, we will expect the number of claims to reduce. I accept that backdating the scheme to February 2010 would breach the 3% levy by taking it to 3.56% over the first four years of the scheme, although it would be comfortably within 3% over the first 10 years. However, I strongly contend that for a multibillion-pound industry that is receiving, as colleagues have pointed out, a £17 million gift and a £30 million loan from the Government, it could easily swallow that cash-flow issue, especially given that, as has been pointed out repeatedly this afternoon, it has been taking income in premiums for such policies over years—in fact, over decades. The money is already in its hands.

Let me remind right hon. and hon. Members that it is not possible to access the scheme unless the technical committee that will manage it takes a view that an employers’ liability insurance policy was in place. It is not possible to access the scheme on the basis that there was no policy; there must be prima facie evidence that there was a policy and that premiums were therefore collected.

I understand and strongly sympathise with the points made by colleagues about the moral case for 100% of average civil damages to be the basis on which the scheme should operate. In fact, I believe that that is the Minister’s, and everybody’s, preferred moral position in relation to the victims of this horrific disease. I was very pleased to hear him put on the record—I think it is the first time he has had the chance to do so—that it was not his view that a figure below 100% was necessary to create some sort of incentive to sufferers to find an insurer rather than simply come to the scheme. I think we have all found quite offensive the suggestion that sufferers are in some way shopping around for the best deal. I am grateful to him for putting on the record that the Government do not believe that that would be the case.

I was struck by the point made by my hon. Friend the Member for Middlesbrough (Andy McDonald)—sadly, he is not in the Chamber at the moment—that because of well-established principles of contributory negligence, in paying out less than 100% to victims we albeit inadvertently send a message to them that it may be perceived that to some degree the suffering that they are facing is their own fault. That is an extremely unfortunate and unjustified message to send to victims who have contracted a disease simply from going out to work to earn a living and support their families. I hope we can all accept that whatever the constraints imposed by the deal that the Minister has been able to negotiate, the moral case for mesothelioma sufferers coming to this scheme is that they should be compensated in full.

The proposal by the hon. Member for Chatham and Aylesford (Tracey Crouch) is supported right across the House. We recognise that an 80% payout is a very reasonable compromise even within the terms of the scheme that the Minister has negotiated. There would be more money in the scheme if the Government and the industry stopped messing around with the likely legal fees that claimants would be facing. The fees were £7,000 and then went down to £2,000, which somehow magically allowed us to get the pay-outs up to 75%, and now they have gone back up to £7,000 again. The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) is not able to join us in today’s debate, but in Committee he made some very telling points about lawyers’ fees. He is a well-paid lawyer, so I am sure he will forgive me for saying that he ought to know —[Interruption.] The fees were considerably more modest than his fees, as I think we all heard. He pointed out that any assumption of the basis on which legal fees were calculated within the scheme would create the danger of that becoming the tariff for its legal fees. The Minister undertook to have further discussions to see whether it would be possible to bear down on the level of legal fees.

I have since been advised by an asbestos victims support group that it has been asked to help to get mesothelioma victims to put pressure on their lawyers to keep the fees low. That is unacceptable. At a time when they are coping with an appalling illness and worrying about the future for their families, as they know they may not even survive to receive the compensation that they are due, the last thing they need is to get into an argument with their lawyers about fees. I really hope that the Minister is able to do much more than simply pass the problem back to victims. Perhaps he will respond to that point in his comments.

Another issue that we discussed in Committee and have not yet got to the bottom of is that a whole range of other fees are covered by the levy, as we have debated during the passage of the Bill: the insurance industry’s legal fees of £24.2 million, as distinct from the victims’ legal fees; the scheme administration costs of £4.4 million; and the set-up costs of £1.4 million. In Committee, the Minister assured me that the industry’s legal fees would be spent to the benefit of claimants and said he would get back to me if he was wrong about that. As he has not done so, I assume that those fees will be spent for the benefit of claimants. However, since he told me that on 12 December, I have been racking my brains as to how they would be spent for the benefit of claimants, and I have not been able to think of anything. I therefore hope that he will now be able to give me chapter and verse on exactly how those fees are to be deployed.

I also hope the Minister will be able to confirm that the sum set aside for setting up and administering the scheme will contain no profit element. This is of particular concern, because we know that the insurance industry itself is likely to bid to run the scheme. The Minister assured us in Committee that the process of appointing the body to run the scheme would be a competitive one. He said it would be based on value for money and commercial criteria, which is welcome, but those criteria would not necessarily preclude the administrator from making a profit: they might simply have to come up with the best price.

I am still in some about doubt about the position on arbitration costs and whether they are also being taken out of the levy. The Minister has not yet responded on that.

All those factors could serve to deplete funds that could otherwise be deployed for more generous pay-outs or to an earlier start date. It really is not good enough that we are still in the dark at this very late stage as to how much of the levy is earmarked for expenditure other than direct payments to victims.

--- Later in debate ---

[Mike Penning]

I understand that that is possible. It could also be dealt with through a deregulation Bill. In any event, we will find the necessary vehicle. As I have said, the Ministry of Justice does not want the courts to be clogged up with requests for court orders, and the matter will be resolved.

[Kate Green]

I am grateful to the Minister, I am also grateful to the hon. Member for Gainsborough (Sir Edward Leigh) for his helpful intervention about the possibility of secondary legislation. Perhaps the Minister could discuss with his colleagues and with the Government’s legal advisers whether the regulations under the Bill—which I expect to complete its passage later this evening—could be used as a vehicle for the change. Although more substantial Bills such as the Deregulation Bill may make some progress between now and July, we have not observed legislation proceeding all that speedily under this Government, particularly given the notorious requirement for a legislative “pause” while Ministers go off and rethink from time to time. Obviously, if the Minister has to use colleagues’ primary legislation to deliver his intent, he will be careful to select a Bill that would pose no such risk.

[Mike Penning]

Just to have a little bit of fun with the hon. Lady, let me point out that, having first been accused of trying to rush the Bill through, I am now being criticised for the fact that the Government are slowing down legislation. One cannot win, can one?

Mesothelioma Bill [Lords]

Debate between Mike Penning and Kate Green

Monday 2nd December 2013 Commons Chamber

[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.