Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2010

My Lords, I shall speak also to the draft Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2010. I confirm that these provisions are compatible with the European Convention on Human Rights. I am very pleased to introduce here two sets of regulations on behalf of the Government, both of which increase payments made to people suffering or bereaved as a result of terrible industrial illnesses. The first regulations are being made under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. Their purpose is to increase the lump sum amounts paid under the Act by 1.5 per cent. The other regulations are being made under Part 4 of the Child Maintenance and Other Payments Act 2008. Their purpose is to increase the amount of compensation paid under the 2008 mesothelioma scheme, so that payments are made at the same level as those paid to mesothelioma sufferers or their dependants under the more generous 1979 Act. In addition, both sets of regulations provide for the majority of dependants who receive awards under the 1979 Act or the 2008 scheme to receive a further increase of up to £5,000. These new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2010. Noble Lords will be aware of the background to the 1979 Act, but it may help if I briefly recap. A person who is injured or contracts an industrial disease as a result of working for a negligent employer may sue the employer for damages. However, some diseases, especially those which are dust-related—for example, mesothelioma, caused by exposure to asbestos—can take a long time to develop and may not be diagnosed until many years after exposure to the agent that caused the illness. By that time, the employer responsible may no longer exist, resulting in people experiencing great difficulty in obtaining compensation for their illness. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979 was introduced to help such people by paying lump-sum compensation to sufferers of certain dust-related diseases, or to their dependants, if they are unable to pursue civil action because their former employers have ceased to carry on business. The 1979 Act covers a number of respiratory diseases, most of which are directly related to asbestos exposure, including mesothelioma, pneumoconiosis, asbestosis, diffuse pleural thickening and primary carcinoma of the lung. The non-asbestos-related diseases covered include coalworkers’ pneumoconiosis, caused by exposure to coal dust; byssinosis, caused by exposure to cotton dust; and silicosis, caused by exposure to silica, among slate miners for example. Noble Lords will need no reminding that all of these are terrible diseases and a heavy legacy of our industrial past. Following the transfer of responsibilities for the 1979 Act to the DWP, we made a commitment to uprate the levels of payment under the Act annually. Traditionally, we have done so in line with increases to industrial injuries disablement benefit payments. Noble Lords will be aware that receipt of IIDB is one of the eligibility criteria for 1979 Act payments. Like other non-income-based social security benefits, IIDB is usually uprated in line with the September retail prices index. As a result of the recent global downturn, however, RPI moved into negative territory for the first time in around 50 years, standing in September 2009 at minus 1.4 percent. That negative inflation would have meant no increases in those social security benefits uprated by RPI, with those relying on them seeing their benefits frozen in cash terms from this April. As such, my right honourable friend the Chancellor announced in last year’s Pre-Budget Report an increase for key carer and disability benefits of 1.5 per cent from April, providing help to people now, when they need it most. This includes an increase in IIDB. We are passing the same increases on to the 1979 Act payments. From April 2010, the maximum amount payable to a person under the 1979 Act will increase to £75,176 for a person aged 37 or under at diagnosis. The actual amount of money paid as a lump sum under the scheme will of course vary for different people, based on the age at which they are diagnosed and their level of disability. The highest amounts are paid for those diagnosed at an early age and for those with higher levels of disability. That compensates for the poor prognosis associated with terrible diseases like mesothelioma and for those who are younger at the point of diagnosis, who will therefore die at a younger age. As I said a moment ago, one of the key diseases that the 1979 Act was designed to compensate for is mesothelioma. It is a particularly unpleasant and fatal disease, caused almost exclusively by exposure to asbestos. Those with mesothelioma often have a short life expectancy and experience complex, debilitating symptoms. I am afraid that the number of deaths from mesothelioma in Great Britain has risen substantially during the past 30 years and continues to rise, with the peak not expected until sometime between 2010 and 2015. In 1968, 153 people died from mesothelioma. By contrast, in 2005, there were more than 2,000 deaths. Between 2006 and 2020, we expect that up to 30,000 people in the UK will die of the disease. Put another way, estimates indicate that one out of every 100 men born between 1940 and 1950 will die from the disease. Although people who develop mesothelioma through their employment have access to lump-sum payments through the 1979 Act, there was previously no provision for people who developed mesothelioma but not as a consequence of their employment. We recognised that this was a weakness in the provision of compensation and, to remedy the situation, we introduced in 2008 the new mesothelioma scheme. The scheme provides for the first time lump-sum payments for mesothelioma sufferers who have been exposed to asbestos but not in the workplace. They may, for example, have been exposed to asbestos through a relative who worked with asbestos, or by living near to an asbestos- producing factory, or from self-employment. Prior to the commencement of the 2008 mesothelioma scheme, those people, whose suffering is as great as those who develop this dreadful disease as a consequence of their employment, may have had no other means of redress. Up to the end of February 2010, 743 mesothelioma sufferers and 74 dependants had received help from the scheme. The amounts payable to sufferers ranged from a minimum of £8,197 to a maximum of £52,772, with an average amount of around £16,000 being paid. The cost of the 2008 mesothelioma scheme is met by compensation recovery; that is, compensation recovered from individuals who are successful in a civil damages claim but who have already received a payment under the 1979 Act or the 2008 scheme. When we started the scheme in 2008, we set awards at a level consistent with the amount of recoveries we expected to make. This meant that payments through the 2008 scheme were lower than amounts payable to mesothelioma sufferers under the 1979 Act. When we introduced the 2008 scheme, we made a commitment to increase the level of payments to match amounts payable to people with mesothelioma under the 1979 Act at the earliest opportunity and as levels of compensation recovery allowed. We expected to be able to do so in the scheme’s third year of operation, in 2011. I am very pleased that we are now able to deliver that commitment from April, only 18 months after the scheme started. From April 2010, therefore, lump-sum payments from the 2008 scheme will increase by around 40 per cent to the same level as those paid under the 1979 Act, taking into account the 1.5 per cent increase to 1979 Act payments. The minimum payment to sufferers therefore increases from £8,197 to £11,678, and the maximum from £52,772 to £75,176. This is the first increase in the amounts payable under the 2008 mesothelioma scheme since its commencement on 1 October 2008. It is our intention in future years to maintain parity in the rates payable under both schemes. The third element of this package of regulations is an increase in the level of payments made to dependants under both schemes. Currently, payments made to dependants under both schemes are at a much lower rate than those made to sufferers during life. We recognise the terrible effects that these diseases can have on families, who have to cope with the effect of the disease on their loved ones, witnessing their pain, suffering and, ultimately, their death. While we acknowledge this by making payments to the families of people who die from these diseases, payments have been at a much lower rate than those made to sufferers during life. That differential in payments puts pressure on sufferers during already extremely difficult times. For example, many feel that they need to rush through a quick claim to the department in order to maximise compensation for their families. Some are too sick to make a claim before dying and therefore their families are able to claim only the lesser amount after the claimant’s death. In addition, because mesothelioma is difficult to diagnose and the disease onset is rapid, some sufferers are not diagnosed until after death. We have listened to the argument put forward by stakeholders and parliamentarians that the difference in payment is unfair and unhelpful. To help families to cope during these extremely difficult times, dependants will now receive an increase of up to £5,000 above the current pay scales. This brings the rate of payment between sufferers and dependants closer together and goes some way towards our commitment to bridge that gap. Dependants who already receive close to the amount paid to the sufferer will receive a proportionate amount, bringing their award up to the level of that paid to the sufferer in life. I am very pleased that these schemes are now performing an important role, providing substantial financial support at very difficult times. However, I am aware that this success is a sad reflection of the rising number of people being affected by asbestos-related diseases. Noble Lords will, I am sure, agree that, while no amount of money will ever compensate individuals and families for the suffering and loss caused by mesothelioma, those who are suffering rightly deserve some form of monetary compensation, and it is essential that sufferers receive compensation before it is too late. These regulations increase the levels of support through the government compensation schemes; they help to ensure that mesothelioma sufferers are able to receive the same amount of compensation from the Government, regardless of whether the disease is a consequence of their employment; and they go a long way towards improving the amount of compensation that a dependant can expect to receive where the sufferer has been unable to claim in their lifetime. The regulations will make a real difference to people in extremely difficult circumstances and I commend them to the Committee.