§ Baroness Hollis of Heigham
rose to move, That the draft regulations laid before the House on 28 January be approved [7th Report from the Joint committee].
The noble Baroness said: My Lords, I beg to move that the draft regulations laid before the House on 28 January be approved. I confirm that in my view the provisions of these regulations are compatible with the European Convention on Human Rights. The regulations are being made under the Pneumoconiosis etc. (Workers' Compensation) Act 1979. Their purpose is to increase by 5.4 per cent the amounts of compensation paid to those people who first satisfy all the conditions for payment on, or after, 1 April 2004. The level of increase corresponds to the increase in inflation since payments under the scheme were last uprated in December 2001. In other words, although there has been a delay in uprating, it has taken fully into account the increase in the cost of living since then.
The Act was introduced to provide compensation for sufferers of certain dust-related diseases or their dependants who were unable to claim damages from the employers where the dust exposure that caused the disease occurred because the employers concerned had ceased to carry on business. In introducing the legislation the government of the day had been motivated by concern over the plight of slate quarry workers in north Wales who had contracted silicosis and had been unable to claim damages because the 403 quarries had closed down. In setting up the scheme the government ignored the findings of a Royal Commission on compensation for personal injury—the Pearson Commission—which concluded that it would be wrong to provide an additional social security benefit to a limited group of people.
The Act recognises the difficulties caused by the nature of dust-related diseases where they can arise from exposure many years previously—in most cases, 20 to 40 years. It is not surprising then that in many cases employers have gone out of business and sufferers or their dependants have no reasonable prospect of making a successful claim.
By introducing this Act the government of the day showed their commitment to helping those who suffered as a result of poor standards of health and safety. The Government maintain that commitment, which is why we have brought forward these regulations for noble Lords to consider.
The Act provides for lump-sum payments to be made to sufferers of certain dust-related diseases, or, where the sufferers have died, to their dependants where there is no realistic chance of success through the courts. The Act covers five main respiratory diseases, most of which are directly related to asbestos exposure. These are: mesothelioma; pneumoconiosis, which includes asbestosis; diffuse pleural thickening; primary carcinoma of the lung, if accompanied by diffuse pleural thickening or asbestosis; and byssinosis.
Today, over 70 per cent of compensation claims paid under the scheme are for those suffering from mesothelioma. It is an extremely severe form of cancer affecting the lung lining and chest wall. The disease can take up to 35 years or more to develop and is invariably terminal within 12 to 18 months. There are three main conditions of entitlement, which must normally be satisfied before a payment can be made. First, that there is no relevant employer who can be sued—effectively, it is in lieu of civil damages; secondly, that no court action has been brought nor compensation received in respect of the disease; and, thirdly, that industrial injuries disablement benefit has been awarded. The original 1948 Act introduced the equivalent of the industrial injuries award, and the 1979 Act added the lump-sum compensation. To make claims for the lump-sum compensation you first must be receiving the pension.
Since the Act came into force there have been 17,565 applications to 31 March 2003, of which 11,786 were successful—approximately 67 per cent. In the early years of the scheme the majority of unsuccessful claims failed because a relevant employer was still in business and there was therefore the opportunity to claim compensation through the courts. It has always been the Government's position that, wherever possible, those responsible for a person contracting a disease should be liable for compensating the victim. The best way to ensure that employers do not care about asbestosis is for the Government automatically to pick up the bill. It is only right and proper, therefore, that these claims should "fail".
404 As time has passed the numbers failing on those grounds have, as would be expected, reduced. In the year to 31 March 2003, 2,099 claims were made. Of the 716 that were rejected, only 131–18 per cent—were refused because there was an employer to sue.
Today the majority of claims are initially rejected because industrial injuries disablement benefit has not been awarded, or has yet to be claimed. That is a precondition. I say "initially" as these people can claim again once disablement benefit has been awarded. There is no problem with claiming subsequently. In 2002–03, 473 of applications—approximately 66 per cent—were refused on this basis. Since the Act came into force in March 2003, nearly 12,000 payments have been made, at a total cost of nearly £120 million. As noble Lords will see, the main reasons for refusal have either been that there has been an employer to sue, or that claimants have not yet claimed industrial injuries disablement benefit.
Responsibility for the administration of the Act transferred to the Department for Work and Pensions from the Department of the Environment, Transport and the Regions in September 2002. That was when DETR broke up, which in turn had inherited the responsibility from the old Department of the Environment. The transfer of this responsibility between departments is the basic explanation of why we have had this slight gap in uprating. We are committed to continuing to administer the compensation scheme in the same sympathetic way as our predecessors. Although rules must be kept, we recognise the suffering and tragedy of each individual case, and we are as generous as the legislation can allow.
The Government have a long-standing commitment to Parliament to regularly review the amounts payable under the scheme to maintain their value. While reviews were undertaken annually, it was not always the case that payments were increased as a result of those reviews. The transfer of responsibility for the administration of the scheme was seen as an opportunity to provide a guaranteed annual increase and to allay the increase in terms of timing with the main social security benefits. I would expect that each time this House debates the annual uprating, we will include the uprating of this benefit.
Alongside providing compensation to those suffering from one of these terrible diseases, the Government are determined that strong, effective measures are taken to minimise the risks posed by asbestos to current and future generations. Failure to fully recognise the risk and take all possible action in previous decades leaves us with a legacy of ill health and death from exposure to asbestos. This legacy continues to claim lives. I recall from the debate that we had on asbestosis that deaths from asbestos now represent more than all other deaths from industrial injury and accident put together. It is that serious an issue. We are determined that future generations should not pay in the same way.
405 We support the high priority given to asbestos by the Health and Safety Commission. Significant controls are now in place, including the requirement that all work carried out with asbestos is subject to the Control of Asbestos at Work Regulations 2002. All work with asbestos coating, asbestos insulation, asbestos insulating board—other than that of very short duration—requires the possession of a licence issued by the Health and Safety Executive. Imports of all types of asbestos are banned, except for a few specialised exceptions, and the use of all types of asbestos is banned, except for a few specialised exceptions.
I hope that your Lordships will agree that although no amount of money can ever begin to compensate individuals and families for their suffering and loss, these regulations allow us to provide some practical and material help. We are seeking to ensure that future generations will not be exposed to the same risks as their predecessors. It is important that we maintain the value of the compensation, and I am confident that your Lordships will agree to that. I commend the order to the House.
§ Moved, That the order laid before the House on 28 January he approved [7th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
§ 3.43 p.m.
§ Lord Higgins
My Lords, this is an immensely sad and serious problem with which one can have the greatest sympathy. I ask the Minister, having thanked her for her explanation, three quick points. First, will she confirm whether the benefit is means tested? Secondly, she says that it has not been uprated for several years, but that it will now be uprated annually. That is certainly welcome. However, does that mean that the real value of the benefit is now less than it was originally, because there has been a period during which it has not been uprated?
Will the Minister tell the House whether one has to have been an employee to get this benefit? If for some other reason one was suffering from asbestos, is the fact that one has been employed at some stage—albeit that the employer may have gone out of business, or one is still employed—an absolutely necessary qualification for getting the industrial injuries disablement benefit, which is a passport to getting this benefit? I would be most grateful if the Minister would clarify those points.
§ 3.45 p.m.
§ Baroness Barker
My Lords, I, too, thank the noble Baroness for her detailed statement. As with many people, I suppose, mesothelioma is a matter that has only recently come to my attention. I noticed the death last year of the music producer, Mickie Most. Like many people, he contracted the disease as a result of working in recording studios in the 1960s and 1970s. 406 More recently, it has come closer to me through an acquaintance. As I did not know much about the payment, I made it my business to find out, and I am indebted to the trade union safety team in Chesterfield for providing me with a briefing, which I shared with the Minister.
The briefing raises several valid questions about the way in which the benefit works in practice. As the noble Baroness will understand, I am always interested in the ways in which benefits can get to people in the most effective way. I also think that we are at a point at which it would not be wrong to review the workings of the scheme. I understand that it is forecast that there will be a rapid increase in the number of people in this position. The peak is likely to come at 2030.
My questions relate to two issues. The Minister mentioned the industrial injuries disablement benefit and the fact that someone must have applied for that, before they can go on to apply for the pneumoconiosis payment. IIDB is not an income replacement benefit; it is paid on top of earnings. It is assessed according to disability, and it is recoverable by the Compensation Recovery Unit. It can affect income support and other benefits. One of the reasons why people may not claim it is that they fear that it will affect their income support.
The second question is about the pneumoconiosis payments and the position of dependants. I understand from what the noble Baroness said that the scheme is meant to prevent people who are very ill and whose life expectancy is short having to go through lengthy litigation. In comparison with civil law compensation, it is very narrow. Can the Minister say whether the definition of the word "dependant" under the scheme is as comprehensive as it should be, given the range of people affected? Noble Lords may be interested to hear about a case that I came across a couple of months ago. It could have a bearing on the forthcoming civil partnership legislation, because it happens to be the partner of a gay man who has been diagnosed.
My second question relates to posthumous claims. I understand that, under the legislation, it will be possible for there to be a posthumous claim. Sometimes, there are enormous difficulties with the diagnosis of such cases. The difference between payments made posthumously and those made while someone is still living is dramatic. Will the Minister comment on that?
Perhaps the most important issue is this: as I understand from what the noble Baroness said, an assessment is made, and, thereafter, no account is taken of a change in a person's circumstances. Can the Minister tell us about that?
The noble Baroness said that the scheme was set up many years ago for a particular purpose. There is a question of whether it is now being operated in the most effective way; that is, through the Compensation Recovery Unit. It could he that the scheme may be operating in a manner which suggests that the Government are bailing out bad employers. Would it be possible to change the way the scheme is operated so that 407 DWP payments are made to all those eligible under the terms of the 1979 Act and then to recover directly any compensation payments made by insurers?
The trade unions safety team has made the point that when people find themselves unwell and know that they are in this position because of the actions of an employer, they are not backward about making a claim. In fact, they are often fuelled by anger and a sense of injustice. I would welcome the response of the noble Baroness explaining how this scheme, which is necessary and will be even more urgently needed over the coming 25 years, might be updated and made more efficient.
§ Baroness Hollis of Heigham
My Lords, I welcome the contributions of both noble Lords and I am happy to clarify some of the points that have been raised. The first point of the noble Lord, Lord Higgins, was answered to some extent by the noble Baroness, Lady Barker. He asked whether the benefit for industrial injuries is means-tested. No, it is not. It can be paid in addition to earnings, should someone have the kind of injury which allows them to carry on working. However, the noble Baroness was right to point out that if the benefit is someone's primary income, they would normally be eligible for a top-up through income support, which is by definition income-related.
Secondly, the noble Lord, Lord Higgins, pressed me on whether, since the sum has not been uprated for a couple of years, anyone has lost out. No, that is why the benefit uprating is 5.4 per cent, thus covering completely the inflation gap since the last uprating. Thereafter the payment is to be uprated annually. People will not have lost out. Indeed, someone eligible now will possibly attain a somewhat higher sum than if they had come into the previous scheme.
§ Baroness Hollis of Heigham
My Lords, the case is similar to that of vaccine damage payments. If a claim was made last year, the claimant would have been paid the sum prevailing at the time. However, it is the case that the RPI loss since the last uprating has been recovered for future claims.
In response to the noble Lord's final point, I can confirm that this is an industrial injury benefit and therefore it is paid only to employees. It is not available to the self-employed and others. I should say that various disability benefits are available for those with the condition. The noble Lord will be aware of them. For example, a householder who contracts asbestosis might be covered under national insurance for incapacity benefit. They may well be eligible for a severe disability premium on top of income support and any carer might be eligible for a carer's allowance. Further, depending on the severity of their condition, they might be eligible for disability living allowance.
408 Thus we have three sets of benefits here. Benefits are available which depend on someone having been an employee; national insurance benefits are available which may be accessed by others if they have appropriate contribution records or credits; and lastly we have the universal benefits such as DLA which are available according to someone's medical condition. Although someone may not be an employee, they would still be eligible for other forms of disability benefit.
I thank the noble Baroness, Lady Barker, for giving me sight of her questions about the workings of the scheme before our debate. I want to put on the record a point that I believe will be of interest to both noble Lords. The noble Baroness asked about the trend of asbestos-related disease. The annual number of mesothelioma deaths, which is the most severe form of the condition, has risen substantially over the past three years. In 2001 there were 1,848 deaths, compared with 1,631 only a year before. I say "only", but even one is one too many—and only 153 deaths in 1968. That demonstrates the exponential rise. The latest statistical modelling suggests that the number of mesothelioma deaths is expected to peak in the range of 1,950 to 2,450 deaths per year at some time between 2011 and 2015. However, the noble Baroness may be right to say that the peak will occur later. It has been estimated that currently there are between one and two asbestos-related lung cancer deaths for each case of mesothelioma.
In response to further questions put by the noble Baroness, I think that I have already confirmed that income support payments can be affected. Understandably, the questions posed by the noble Baroness reflect those of the support groups. She has asked whether we can extend the range and generosity of the scheme. She asked also about dependants, in particular whether the definition of "dependant" could be extended to include partners. It is right, given the Civil Partnerships Bill and so forth, that we should look at this issue. My honourable friend in the other place, Mr Des Browne, the Minister for Work and Pensions, is keeping the scheme under review. I know that he is very interested in this issue and I am confident that he is exploring this and other questions.
Finally, the noble Baroness asked about weighting. Our payments are weighted to compensate for what is expected to be the future occurrence of the disease. Perhaps the noble Baroness has evidence, but I am not aware of any suggestion that getting an early diagnosis and being assessed as having a partial industrial injury would result in someone being out of pocket; that is, eligible for less money than they would have received had they put in a claim later, when the disease had become more severe. I have checked this point with my officials. Mesothelioma is a swiftly progressive disease and that is taken into account in the weighting of compensation. However, if the noble Baroness has further concerns on this point, I can certainly make available to her the guidance which sets out the technical details of how the benefits are weighted to ensure that we do not appear to be exploiting the fact that people may not have taken up the best option when they come to register their disease.
409 I believe that I have now responded to all the questions raised by noble Lords and I hope that, as a result, they will join me in welcoming this useful increase for people who are in a most distressing situation.
§ On Question, Motion agreed to.