Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2024

Viscount Younger of Leckie Excerpts

Monday 19th February 2024 Grand Committee

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2024.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I will also speak to the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2024 and the draft Pneumoconiosis etc. (Workers’ Compensation) (Specified Diseases and Prescribed Occupations) (Amendment) Regulations 2024.

The schemes we are debating today provide vital support for sufferers of dust-related diseases often caused by occupational exposure to asbestos and other harmful dusts. This includes diseases such as pneumoconiosis and mesothelioma. Although both schemes aim to provide compensation to sufferers within their lifetime, each scheme also allows for claims by dependants if, sadly, the person suffering from the disease passes away before they are able to claim. This is in recognition of the suffering these diseases can bring to whole families.

The changes we are debating today will apply equally to those in England, Wales and Scotland. The Government recognise that addressing Great Britain’s asbestos legacy, particularly in public buildings, remains a key issue. We also understand the crucial role that research and early detection can play in the fight against cancer and other diseases covered by these schemes. We continue to make progress in this space, with the rollout of the NHS targeted lung cancer screening programme, and around £122 million invested in cancer research in 2022-23 through the National Institute for Health and Care Research. However, while individuals continue to be diagnosed with these terrible diseases, the lump sum schemes remain a vital source of financial support for sufferers and their families.

I will now take a moment to provide some additional background to the schemes. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979, which—noble Lords will be relieved to hear—for simplicity I shall refer to as the 1979 Act scheme, provides a single lump sum compensation payment to eligible individuals who suffer from one of the diseases covered by the scheme. This includes diffuse mesothelioma, pneumoconiosis and three other dust-related respiratory diseases. It was designed to compensate people who were unable to claim damages from former employers that had gone out of business and who had not brought any civil action against another party for damages. To be entitled to a lump sum award, claimants must have an industrial injuries disablement benefit award for a disease covered by the 1979 Act scheme.

The 2008 mesothelioma lump sum payments scheme, which I will refer to as the 2008 Act scheme, was introduced to provide compensation to people who contracted diffuse mesothelioma but were unable to claim compensation through the 1979 Act scheme. This may have been because they were a self-employed worker or their exposure to asbestos was not due to their work. The 2008 Act scheme provides support quickly to people with diffuse mesothelioma, at their time of greatest need.

This Government recognise the suffering that diseases such as mesothelioma and pneumoconiosis cause to sufferers and their families. I know that many noble Lords will be aware of friends and close colleagues from your Lordships’ House who have lost their lives as a result of these dreadful diseases. I have known two people who have succumbed. We must remember the great impact these illnesses have on people and their families.

Each year, the schemes continue to provide vital financial support to sufferers and their families. Between April 2022 and March 2023, the latest financial year for which data is available, 2,860 awards were made across both schemes, with expenditure totalling £42.3 million. However, between now and 2028-29, expenditure on the schemes is forecast to fall by 8% in real terms. In part, this may reflect historical changes in the domestic workforce but also improved health and safety provision more widely. This may provide some hope that fewer families will suffer the impacts of these terrible diseases going forward.

Two of the instruments we are debating today seek to increase the value of one-off, lump-sum payments made under the 2008 Act scheme and 1979 Act scheme respectively, this time by 6.7%. These new rates will apply to those who first become entitled to a payment from 1 April 2024. As many noble Lords will be aware, these two schemes are not included in the main social security benefits uprating procedure. However, a 6.7% increase is in line with the September 2023 consumer prices index and mirrors the proposed increases to industrial injuries disablement benefit payments and other disability benefits. As I outlined this time last year, there is no statutory requirement to review the level of these payments annually. However, the department has decided to uprate payments under both lump-sum schemes together, in line with inflation, since 2010. I reassure noble Lords that this year will be no different, which reflects the continued importance of the support provided by these schemes.

This year, in addition to the uprating instruments, I ask that the Committee considers a third draft instrument. Unlike uprating, this instrument will not form part of an annual process. Instead, it seeks to extend the eligibility criteria under the 1979 Act scheme. This instrument will simply realign the diseases which may bring entitlement to a payment under that scheme with those that may bring entitlement to IIDB, ensuring that the original policy intent of the 1979 Act is reflected in the legislation. In doing so, it will widen the 1979 Act scheme entitlement to customers suffering from two additional dust-related conditions; first, unilateral or one-sided diffuse pleural thickening and, secondly, asbestos-related primary carcinoma of the lung where there is no accompanying asbestosis.

As many noble Lords are aware, the department is advised by the Industrial Injuries Advisory Council—an independent scientific body, called IIAC—on changes to the list of prescribed diseases for which IIDB can be paid. At the point that they were added to the 1979 Act legislation, the specified diseases exactly mirrored diseases listed in the relevant IIDB legislation. Over time, IIAC has recommended several changes to IIDB prescribed diseases that are also specified in the 1979 Act, which have been accepted by the department.

The unintended impact of accepting these recommendations was that people who suffer from one-sided diffuse pleural thickening and primary carcinoma of the lung with occupational exposure to asbestos, but no accompanying asbestosis, are now potentially eligible for IIDB but not eligible for an award under the 1979 Act scheme. This divergence was first identified in September 2023, when officials were asked to provide clarification on entitlement for an individual case. Officials have worked at pace since September to bring forward the legislation that we are debating today.

The proposed amendments seek to address this divergence by realigning diseases specified in the 1979 Act legislation with those which may bring entitlement to IIDB. If approved, this instrument will mean that the diseases specified in the 1979 Act legislation are based on an improved clinical understanding and that the original policy intent of the 1979 Act is reflected fully in legislation.

Historically, payments have been made to sufferers of these two diseases, despite the divergence identified in the legislation. This was because the department was using diseases set out in the IIDB legislation when considering entitlement to a lump-sum award under the 1979 Act scheme. Importantly, our understanding is, therefore, that customers who made claims for these two diseases historically have not missed out as a result of the change not being made sooner.

As of 16 February, the department was holding 94 claims made since September 2023 where it has not been possible to establish entitlement under the current legislation, but where the criteria would be met under the proposed legislation. If it is approved today, we will pay these customers as soon as possible.

Overall, we estimate that this change will extend legislative entitlement to a 1979 Act scheme lump-sum award to approximately 300 people a year with one-sided diffuse pleural thickening and asbestos-related primary carcinoma of the lung—a reflection of the vital role the schemes play in providing compensation to those affected by these terrible diseases. I am sure—I hope—that noble Lords here today will join me in recognising the continued importance of the compensation provided by these schemes.

Finally, as a part of my role, I am required to confirm that each of these three provisions is compatible with the European Convention on Human Rights, and I can gladly do so. I commend the proposed amendments to these schemes to the Grand Committee and ask noble Lords’ approval to implement them. I beg to move.

[Baroness Blower (Lab)]

My Lords, as general secretary of the National Union of Teachers, I was aware of a number of members who died from school-acquired mesothelioma. I declare an interest: having worked in an asbestos-contaminated school myself, I have that registered on my medical record, although I am in good health at the moment.

These lump-sum payments are meant to provide some compensation for asbestos victims who cannot get civil compensation from a former employer, but there is an inconsistency in the schemes. If a surviving partner or dependant must claim after their loved one has died, they receive a substantially lower payment. In 2019-20, a 77 year-old with mesothelioma would have received £14,334 if they claimed themselves, but if they died before claiming, which can of course happen with a cancer that is both aggressive and difficult to diagnose, their surviving partner or dependent child would have received £7,949. Mesothelioma patients typically have months left to live at the time of their diagnosis.

Many surviving partners, often women on modest wages or pensions, suffer financial hardship after the loss of their loved one. Their household income falls, but many of their outgoings remain the same. In that situation, they are further disadvantaged if they can receive only the much lower posthumous payment, so there is a clear moral case for raising that payment. Of the 3,830 payments made in 2018, only 260 were posthumous claims, according to the figures I have from the TUC. It estimates that it would cost £1.5 million to equalise payments. In its view, and indeed mine, raising the level of posthumous payments is therefore affordable.

In 2010, the Government acknowledged that there was no justification for the differential payments, stating that the inequality in payments could put pressure on victims’ families when they are most vulnerable. Does the Minister agree that it is now time to change this and equalise the payments?

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, I start by thanking all noble Lords here today for their contributions to this short debate. As has been the case in previous years, it has demonstrated the profound interest in these schemes that is present in the House—indeed, in this Committee.

I should start off by saying this: it is important that we all remain mindful that these debates are about those whose lives have been impacted by these dreadful diseases. I particularly appreciate the attendance of the noble Baronesses, Lady Donaghy and Lady Finlay, who have broken off from their committee; again, it emphasises the importance of this subject.

The Government recognise that the two schemes we are debating today form a crucial part of the support that is available to people suffering from dust-related conditions and their families. It is right that we ensure that the value of these compensation schemes is retained, especially in these difficult times. In addition to ensuring that these awards are uprated for those who first become entitled from 1 April 2024, the Government are also proposing to make changes to the list of diseases that may bring entitlement to compensation under the 1979 Act scheme.

A number of questions were asked. I will attempt to answer them all; I hope that there will not be any duplication in what I say. I shall mark my own homework on that; I am sure that noble Lords will do so too.

First, the noble Baronesses, Lady Blower, Lady Donaghy and Lady Sherlock, referred to equalisation and dependant awards, asking: why do dependants get lower awards than sufferers and when will the Government equalise these award rates? It is clear that whole families can be devastated by these diseases, as I said earlier; that is why dependants can claim compensation following the passing of their loved ones. The Government remain of the view that available funding should be prioritised to those people who are currently living with the disease. This position is in line with the main purpose of these schemes: to provide financial support to people living with certain diseases, and to help them deal with the issues that illness brings. I hope that I have a figure for the noble Baroness, Lady Sherlock; I will address that in a moment.

The noble Baronesses, Lady Sherlock and Lady Blower, asked further questions about disparity, including on the number of recipients of payments under the 1979 scheme who were aged 77 or over and the number aged 37 years and under. They also asked for the breakdown of payments by industry. I can tell the Committee that, in the last full financial year for which published data is available—April 2022 to March 2023—2,460 awards were paid under the 1979 scheme. Some 1,400 of the awards paid—57% of them—were for individuals aged 77 and over, while fewer than five awards paid were for individuals aged 37 and under. Unfortunately, information on the occupational and industry breakdown of recipients of the lump sum schemes is not published and is not readily available; this would require analysis of multiple datasets for the 1979 scheme and the industrial injuries disablement benefit in order to determine occupational and industrial formation. I have probably gone a bit further than the question that was asked but I hope that that is helpful.

The noble Baronesses, Lady Blower and Lady Finlay, asked further questions about equalisation. Around 90% of the payments made under both schemes are paid to sufferers of the diseases covered by the schemes. As I have said already, we are prioritising those living with the diseases.

We estimate that to equalise awards for people diagnosed with the disease and dependants in 2024-25 would require an additional £1.4 million a year from the DEL budget. No provision has been made for this in the current spending review settlement. I think the figure that the noble Baroness, Lady Sherlock, might like to have is the £1.25 million figure that has been raised today.

The noble Baronesses, Lady Finlay and Lady Blower, raised important questions about asbestos in schools and public buildings. I will attempt to address these questions. It is obviously incredibly serious, and the Department for Education expects all local authorities, governing bodies and academy trusts to have robust plans in place to manage asbestos in school buildings effectively in line with their legal duties. Well-maintained and safe school buildings are a priority for the Government, and we have allocated more than £15 billion of capital funding since 2015, including £1.8 billion this financial year. This comes on top of our 10-year school rebuilding programme, which will transform buildings at more than 500 schools. Where there are serious issues with buildings that cannot be managed by responsible bodies, the Department for Education provides additional support on a case-by-case basis.

Moving onto public buildings, the Government agree that continuing to build on the evidence base around the safe management and disposal of asbestos is fundamental in ensuring that the risks posed by its past use are minimised. The Health and Safety Executive has a mature and comprehensive regulatory framework to ensure that legacy asbestos risks in Great Britain are managed that aligns with the best evidence currently available. This is reflected throughout the approaches outlined in the Control of Asbestos Regulations 2012—CAR. Correct implementation of CAR not only ensures management of risks of exposure but will eventually lead to the elimination of asbestos from the built environment without the need for any target deadline.

The noble Baroness, Lady Finlay, raised supporting research into mesothelioma. Research is crucial, as I am sure the noble Baroness will tell me, in the fight against cancer. The Department of Health and Social Care invested around £122 million in cancer research in 2022-23 through the National Institute for Health and Care Research, which I think I mentioned in my opening remarks. For several years, DHSC has been working actively to stimulate an increase in the level of mesothelioma research activity from a rather low base. This includes a formal research priority-setting exercise, a National Cancer Research Institute workshop and a specific call for research proposals through the National Institute for Health and Care Research. I hope that chimes with the knowledge that the noble Baroness no doubt brings to this Committee.

In 2018, the British Lung Foundation launched the UK’s first Mesothelioma Research Network, the MRN, with the involvement of key stakeholders, including DHSC. The vision of MRN is to improve outcomes for people affected by mesothelioma by bringing researchers together and therefore driving research progress and improving the quality of research. The network is supported by a £5 million donation from the Victor Dahdaleh Foundation, which matches the funding given to Imperial College London by the Government to establish the National Centre for Mesothelioma Research. I could say more about this, but it might be better if I write more to the noble Baroness on this important matter. I suspect she knows a lot of it, but it is important, and I will copy in all Members of this Committee.

The noble Lord, Lord Allan of Hallam, asked which cases might lose out on the uprated rates if they are paid before April. Perhaps I can provide some form of reassurance. The uprating regulations apply only in relation to any case in which a person first fulfils the conditions of entitlement to a payment under the 1979 Act scheme on or after 1 April 2024. As the cases being held will have first become entitled to a payment under the 1979 Act scheme before 1 April 2024, the amount they will receive is unaffected by the uprating. I hope that clarifies that. I think I might have mentioned that in my opening remarks, but I just say it to re-clarify it.

The noble Lord, Lord Allan, and the noble Baroness, Lady Sherlock, asked about historic claimants paid ultra vires. I reassure both of them that their understanding of my understanding or perhaps my understanding of their understanding is correct, whichever way around that reads best.

The noble Lord, Lord Allan, asked whether anybody has missed out. I probably covered that okay in my previous responses, but perhaps to go a bit further the department understands that historic claims made for these two conditions will have already received lump sum payments. As a result, to reclarify, these claimants have not missed out on a payment because this change was not made sooner.

The noble Baroness, Lady Sherlock, asked whether in situations where a sufferer dies before a successful claim is paid the lump sum payment is paid to the estate of the deceased at the same rate. If someone with the disease makes a claim but dies before payment is made, the payment is made to their estate at the same rate that they would have received had they received their payment while they were alive.

The noble Lord, Lord Allan of Hallam, asked who will benefit from this change and whether this will benefit only new claims or historic claims. I think have covered that. The noble Lord may wish to rise if I have not.

[Lord Allan of Hallam (LD)]

I am grateful to the Minister. The question also relates to the previous answer that he gave. If somebody in the new category that we are talking about had applied in August last year, they would have received the payment; however, had they applied in October, they would be held in the queue. We want to understand that a person who has been held in the queue because they applied in October—at that point, the department understood that it did not have the legal authority—will not lose out in any way, particularly if, sadly, they have passed away between their application and now, the point at which we can release the funds because we have passed this statutory instrument. I do not want to delay this any longer; the faster we get it, the better.

[Viscount Younger of Leckie (Con)]

Absolutely. That was my understanding too. My understanding is that they would not lose out, given the case raised by the noble Lord. If that is not correct for any reason, I will certainly write to him; however, I have made it clear that nobody will lose, and I should stick to that point.

The noble Baroness, Lady Sherlock, asked about gender differences. Her question was interesting; she asked it last year but did not get an answer, I think. There is always a degree of uncertainty in predicting future disease incidence, but the annually published data from the HSE show that annual mesothelioma deaths were broadly similar in the period from 2012 to 2020 but lower in 2021. Before that, annual deaths had been rising steadily since the late 1960s, but current projections suggest that annual mesothelioma deaths in both males and females are expected to decline over the long term as a consequence of past reductions in asbestos exposure for both males and females.

How soon the decline in annual deaths will become evident is expected to be different, with deaths among males declining during the 2020s and deaths among females remaining broadly level during that period before starting to decline. The reason for this lies in different patterns of asbestos exposure in males and females in the past—the noble Baroness will appreciate that, I think—with heavy exposures being reduced or eliminated sooner in specific industries where fewer females worked, such as shipbuilding, insulation work and asbestos product manufacturing.

The noble Baroness, Lady Sherlock, asked about regional variations. Some asbestos exposures, such as during construction work, were widespread across all regions whereas other exposures, for example those I alluded to earlier associated with shipyards and asbestos product factories, were associated with particular regions. Of course, those regions still tend to have higher mortality rates today, sadly.

I should make a point of clarification to do with equalisation. We estimate that to equalise awards for people diagnosed with the disease and dependants in 2024-25 would require an additional £1 million to £4 million a year—I think I said £1.4 million and I apologise for that—from the DEL budget and no provision has been made for that in the current spending review settlement.

With that, I hope I have answered all the questions.

Motion agreed.