Mesothelioma Bill [Lords]

Sammy Wilson Excerpts

Tuesday 7th January 2014 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

Will the right hon. Gentleman accept that of course the insurance industry is going to come in with a heavy hand, arguing that it will take this to court and make legal challenges and that will delay things? We had the same experience with pleural plaques legislation in Northern Ireland. The industry backed down when the legislation went through. Given that the insurance companies have reaped the benefit of these premiums over the years, is it not up to this House to make sure they pay out proper sums to the victims?

[Mr Brown]

The answer to that is that they did take the premiums and prior to 2007 there was an assumption that pleural plaques cases could go against the insurers. It was only the High Court 2007 judgment that put a stop to all that. The premiums did not have to be refunded; they were just kept. The figure I have for that is over £1.4 billion held by the insurers. If companies have taken premiums for something they are never going to have to pay out for, that seems to me to be a pretty good business.

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[Mr Brown]

I agree wholeheartedly with the Minister on that point. My thoughts are with the young children in Leeds who found an abandoned pile of what turned out to be asbestos dust that had not yet been mixed with water and used for its purpose. The children, being children, formed it into “snowballs” and threw them at each other and breathed in the dust. Some 40 or 50 years later, their cases are now turning up as mesothelioma cases, but who is the insurer or the employer? It is difficult to say who is the responsible party. No one could possibly argue that those young children contributed to the ill health that they are suffering later in life. The Minister rightly says that we must deal effectively with such public liability cases, and I wholeheartedly support him in trying to find a way of addressing the matter.

There are two arguments against my proposal for 100% compensation. The first—and, incidentally, the weakest—is that it would incentivise the victim to see whether there was an insurer or employer against whom a case could be taken. It is argued that the prospect of getting 100% compensation, compared with 70% under the proposed scheme of last resort, would incentivise someone—whose life expectancy was now a matter of months rather than years—to go out and hunt for the insurer or employer, using whatever resources were available to them.

Let us pause and think about that. How on earth would an ordinary citizen go about tracking down those missing people? A good argument that was made in the other place was that the incentivisation should surely work the other way round. If there is to be incentivisation through paying less compensation, surely we should make the compensation not 100% but 110%, so that the administrators of the scheme, who had access to the former insurance companies’ records, would have to go hunting to determine whether it was possible to launch a case. They should be the ones to be incentivised. I am not arguing for more than 100% compensation, by the way, although I did table a proposal to that effect in Committee.

I believe that any incentivisation should work in that way, rather than suggesting that some poor old victim whose days are numbered should turn themselves into a modern-day Perry Mason and hunt down an employer that probably no longer exists—particularly in the case of a contractor—or an insurance company that has gone into receivership or will not acknowledge its liabilities. I think that the argument about incentivisation is pretty disgusting, and I do not support it.

[Sammy Wilson]

Does the right hon. Gentleman also accept that the very people towards whom the incentive might be directed are least able to track down those organisations? The situation would be doubly unfair, because their health is not great and they do not have the resources to do the tracking.

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[Sammy Wilson]

Is it not even more disgusting that the money clawed back is then given in compensation to the insurance companies to reduce their costs?

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[Ian Lavery]

Yes, the consultation document was issued in 2010, but the cut-off date in the Bill will be 25 July 2012. I cannot see any rationale for that. I cannot understand the reason for it. Eligibility should at least commence with the publication of the consultation document in February 2010, but, as I say, there are strong arguments for going back even further.

It comes down to whose side we are on. As politicians, we face tough choices every day of the week. Are we on the side of the victim who will sadly pass on within months, or are we on the side of the insurance companies, which, as the Minister said, had to be dragged to the table to pay any compensation at all? The insurance companies are getting £17 million from the Government just to start the scheme, and it has been agreed they will get a further £30 million from them through some sort of borrowing arrangement.

In conclusion, when someone with mesothelioma who is soon to pass on comes to one of our surgeries and we explain that the insurance companies have only to pay 75% compensation, I wonder what their reaction will be. It is not fair, it is not just, and it is not acceptable. Wherever there is 100% liability, there should be 100% payment.

[Sammy Wilson]

It is a privilege to follow the hon. Member for Wansbeck (Ian Lavery). He has brought the human side of this debate into the Chamber, which is important, because while we can throw around the percentages that insurance companies will have to pay, cut-off dates and so on, we need to remember that we are dealing with people who have suffered greatly as a result of their employers’ negligence, not their own, and whose suffering will inevitably result in death.

At the outset, I also pay tribute to the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who is fondly remembered in Northern Ireland, where he served as a Minister. Since he left office, he has always taken a great interest in the affairs of Northern Ireland. I also pay tribute to the Minister. Although I am critical of much of the Bill, I fully understand the pressures he came under when introducing it.

The insurance companies are not easy to deal with and when it comes to paying out, they are bullies. I had a similar experience in Northern Ireland when we were taking through legislation to overturn the House of Lords decision on pleural plaques. Officials advised that we should not do it as we would have a hard time. The insurance companies jumped up and down, threatening all kinds of legal action. They threatened to challenge the legislation in Northern Ireland; the argument was that we would be raising expectations and that the measure would be delayed for years. But at the end of the day, when it was seen that there was a determination to push it through—and it did go through—it was, ironically, the Attorney-General for Northern Ireland who challenged it in the courts, and lost. [Hon. Members: “Your friend?”] My friend, yes.

[Mike Penning]

I have had my own experiences with the Attorney-General when I was a Minister in Northern Ireland; I am sure other colleagues have as well. The difference between what is happening here today and what happened in Northern Ireland was that we have done a deal with the insurance companies before proposing the Bill rather than, as in the negotiations on pleural plaques, there not being a deal, so the legislation had to be forced through. That is the real difference; we have an agreement that will not affect businesses or premiums and will allow us to get the money through.

[Sammy Wilson]

I want to come on to that agreement. As the hon. Member for Wansbeck (Ian Lavery) said, at the end of the day this Parliament sets the rules by which insurance companies and everybody else must abide. I understand that the Minister has had the discussions with the insurance companies. I have to say that I think that the companies have come out with a very good deal. Do not forget; despite the fact that we are dealing with people who perhaps cannot trace where the insurance was with their companies, that does not mean that, in most cases, the insurance was not paid. The premiums went to the insurance companies. They benefited from the money and they have not paid it out when the claims were made. This is not a case of there never being any insurance paid, in many cases. In most cases, the insurance was paid and the insurance companies have escaped.

Secondly, as has been pointed out, as a result of House of Lords decisions and other decisions on claims that could have been paid for pleural plaques, for example, the insurance companies have got a windfall. We can debate the size of that windfall but figures up to £1.4 billion have been thrown around. On top of that, the Government will underwrite part of the cost; £17 million plus another £30 million loan to them. Then, the companies will only have to pay out 75%, and 50% of the people who should have been covered—because they did experience health problems as a result of exposure to asbestos—are not even covered. I reckon that that is a very good deal for the companies. If this House were to say, “We think that the deal struck is overly generous and we are going to make amendments to the Bill to compensate for the overly generous deal that was struck,” I doubt very much that the insurance companies would walk away or that they would challenge it, especially as the mood of the House is that many people who should have been included in this are not, and that there are levels of compensation that should have been paid that are not being paid. Those are the kinds of arguments that I have found persuasive when listening to the arguments for the amendments.

The Minister has sat face to face across the table with the insurance companies. It is his judgment that the insurance companies will not buy any strengthening of the Bill. Given the generosity of the deal and that insurance companies try to eyeball Ministers and see who blinks first, it is my judgment that if the Government stand firm, we can get a better deal for those who suffer enormously as a result of negligence.

[Ian Mearns (Gateshead) (Lab)]

Surely the nature of the insurance business in this respect is that the risk is spread over a whole range of different liabilities. The very fact that the insurance companies have done that means that they should pay up when they ought to. They are not doing so; they are trying to wriggle out of it.

[Sammy Wilson]

I wanted to come on to that point, so I will jump to it now. The risk is, of course, fairly minimal in any case. First, it has already been covered and, secondly, I heard the Minister say that this cannot be passed on through additional premiums on employers’ liability insurance. No Minister can guarantee that when insurance premiums go up, some of the marginal increase is not to enable the additional costs to be recouped by the insurance industry. I do not know what kind of scrutiny of employers’ liability insurance premiums the Minister intends to introduce to ensure that the costs are not passed on, but in any case, as the hon. Member for Chatham and Aylesford (Tracey Crouch) has pointed out, the insurance companies will already have made provision for this Bill.

[Ian Paisley (North Antrim) (DUP)]

My hon. Friend is making a compelling case. He is absolutely right about how the insurance companies will operate in this field. They not only insure the initial risk, but sell it on. We can be assured that they are definitely covered, and I believe that the Minister should take cognisance of that in making his decision.

[Sammy Wilson]

I thank my hon. Friend.

Let me deal with the two amendments that deal with whether the compensation level is acceptable. For 28 years, I represented east Belfast—the inner part within the shadow of the shipyard—on Belfast city council, and I saw and represented, at disability living allowance tribunals and so forth, many people who had suffered as a result of exposure to asbestos in the shipyard. I have seen the suffering that they went through. I have gone into their houses and seen people who could hardly walk across a 12-foot wide living room, who could not climb the stairs and who knew that they were in for a horrible and painful death. Those are the sort of people we are talking about, and that is the outcome of the exposure to which they have been subjected. That is what we are dealing with.

I must say that I find it grossly offensive that people who qualify for 75% compensation under this scheme will have 100% of their benefits taken from them, yet that will be paid back to the insurance companies to try to “relieve the burden” on companies that already have the money to cover the costs. We should bear that in mind when we look at amendments 1 and 4, which provide for increasing the level of compensation.

[Jim Shannon]

We are very much focusing on what happened to the individuals who had the disease, but perhaps we have not focused enough on the ripple effect on the families that comes out of that. Does my hon. Friend agree that it is not just individuals, but families and wider family circles that are involved, and that because of that, the squeeze should be put on the insurance companies to ensure that they pay more? Should not the Minister do that as well?

[Sammy Wilson]

We should, of course, bear in mind what it is like for any wife, husband or child who sees their father, mother or son going through the sort of agonies they have to endure when they die from this disease.

Let me deal with the issue of the cut-off date. I understand that cut-off dates are difficult: how should we choose them? No matter what is chosen, some people are going to feel aggrieved or short-changed. The proposer of the amendment spoke about a range of cut-off dates, going right back to before the war when people first knew that exposure to asbestos led to a terrible disease and death. However, there must be some logic to the cut-off dates that we set, and, in seeking that logic, we should be asking how we can apply it to encompass as many people as possible.

Although I am not particularly happy with it, there is logic in the argument for a cut-off date of 2010, when expectations were first raised and the insurance industry was first notified, and when preparations for the payment of compensation could begin. The Minister said that setting a date of 2010 would add £80 million to the cost of the Bill, but I should like him to explain how he arrived at that figure. Given the 75%, the cost of payments will be £343 million over the next 10 years. It has been accepted—and I saw the Minister nod on a number of occasions when this was mentioned—that the bulk of cases will arise in future years. How can we have a figure of £343 million for the next 10 years, during which we expect the bulk of cases to arise, and a figure of £80 million for the two years preceding 2012? Those figures simply do not add up. I should be happy to hear the Minister’s explanation now, or, if he prefers, when he sums up the debate, but I suspect that the figure has been over-inflated and gold-plated in an attempt to establish arguments for not setting a date of 2010, presumably because the insurance companies will ensure that that does not happen.

[Mark Lazarowicz]

Like the hon. Gentleman, I could not see where the figure had come from. If the Minister has that information, should he not give it to us now in order to illuminate the debate?

[Sammy Wilson]

I will happily give way to the Minister if he can provide an explanation. However, I should point out to him that even if we did incur an additional £80 million—and I suspect that it will be nowhere near £80 million, because £80 million does not seem logical—according to the Minister’s own figures, that would add 0.53% to the premiums that the companies would have to provide, while also encompassing, as we have heard, 700 people who are currently not covered by the scheme.

I realise that much of what I have said has been negative. I understand the pressures that the Minister is under, and I believe that the attitude that he has taken today shows that he genuinely wants to help those who suffer from this disease and will die as a result of it. However, I also believe that more can be done. I believe that logic is on the side of those who have tabled the amendments, and I trust that the House will support them when they are put to a vote.

[John Woodcock]

I shall speak only briefly.

I support all Members on both sides of the House who are pushing for more in this deal. As I said in an intervention earlier, Barrow contains the largest number of mesothelioma victims in the country. In most of those cases, the employer can be traced, because it was the Vickers shipyard. However, the families of the victims—wives who have seen their husbands die, children who have seen their fathers, and in some instances their mothers, experience that horrible, horrible death—are standing in solidarity with other families throughout the country, just as they have throughout the struggle for appropriate compensation that has continued for far too long.

Let us be clear about the fact that there can be no total fairness in this regard. If there were total fairness, people who went to work to do an honest job, to earn a living, to build ships and to work in industry would not have caught this disease and died in terrible ways, or caught a disease which is a ticking time bomb and which hangs over their lives now. Do we want to see premiums go up for current payers of insurance cover? No of course we do not, but it is absolutely clear that the victims who have waited so long for compensation should not be the ones who continue to bear the financial cost and penalty of this.