My Lords, we need alternates. I am looking forward to an imminent group where I shall have nothing to say. I am sure that the Committee is looking forward to it even more.
This is one amendment in a group that deal with the start date or, as it might also be described, the cut-off date. Amendment 9 is the most radical amendment in the group. It would simply abolish the start date of 25 July 2012, which is written into the Bill, so that the scheme would then encompass anyone who is still alive and contracts mesothelioma in consequence of employer’s negligence and their dependants, as well as the dependants of people who have already died.
The noble Lord, Lord Freud, explained to us at Second Reading that the case for disqualifying anybody who was diagnosed with the disease before 25 July 2012 was that it was only at that moment, when he made a Statement to Parliament in which he declared the Government’s intention to introduce this scheme, that the insurers could start to reserve to meet the costs of the scheme. I would certainly take the view that at the very least, we should go back to the date at which my noble friend Lord McKenzie of Luton, the Minister’s predecessor, announced his consultation with a view to introducing the scheme on 10 February 2010. From that moment onwards, the contingency was clearly foreseeable by the employer’s liability insurers. I would go further even than my noble friend Lord McKenzie goes in his amendment. I would simply say that the insurers should always have reserved. That is what insurance is about.
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Insurers take the premiums and invest them, distribute dividends to their shareholders and profits to the members of their syndicates, but it is their duty, as it always has been, to reserve adequately to meet claims. If, instead, they decide that they will shred the policies—I speak a little melodramatically but if, as is all too convenient to them, they lose the policies—they make even more money.
The Minister said in response to my intervention on Second Reading that if there were to be an amendment such as I have now tabled, it would cost a huge amount. It would be helpful if he were able to tell the Committee his best estimate of how much that would be. I contend that, although it will undoubtedly be a substantial sum, the industry can afford it. It would hate to have to pay it, but it can afford it. My noble friend Lord Wills made this point in the preceding debate. For decades, they coined money. They made a very great deal of money, particularly in insuring against long-latency diseases, because they did not have to pay out for such a long period.
Of course, there were insurers who made a mess of their business and got themselves into terrible trouble with long-term insurance, but the opportunity was
there for them to make money on an heroic scale, if we consider the effect of compound interest. I do not have the figures to hand, but DWP officials are adept at making computations and one of the officials sitting behind the Minister may be able to do this sum before the Minister responds. Supposing, illustratively, a premium of £100 was paid and was invested at 5% compound annual interest over 30 years, that will have turned into a very substantial sum indeed. If it was invested over 40 years, which can be the period of incubation of the disease, it will be a very much greater sum still. It would be interesting to know what the cash figure would be and what the percentage increase would have been in those cases.
I make that point because I think that the figures would be startling and illustrate that, provided that the insurers have not simply squandered all that premium income or invested it disastrously badly, they could not but have made substantial sums of money. I think that they are better placed than they have let on to the Minister in his strenuous negotiations with them to pay decent amounts of money towards the scheme and to extend the range of beneficiaries.
It seems desperately arbitrary and unjust to exclude victims who were diagnosed before 25 July 2012. All of us have received briefing that is distressing to read about the hardship that families have experienced, such as bereaved people losing their homes. The Minister has a heart; we know that. He has toiled long and hard to achieve agreement with the industry on the scheme before us. I do not doubt that he has battled with the Treasury, which was no doubt less than enthusiastic about it. I am sure that he is susceptible to the emotional force of the case. If he fears that the insurance industry will revert to its default posture of litigating against any attempt to extract money from it, I hope that he will be fortified by two considerations. First, if he accepts my amendment, or any of the others, he will have statute on his side. Secondly, if he fears that the employer’s liability insurers will take legal action against him, he might also fear that the families, the claimants, might take legal action on the basis that they have been most unjustly discriminated against by the cut-off date.
The principle is there and the practicalities ought to be thought about. On a rough calculation, if 1,200 people were to be added to the number of beneficiaries by extending back eligibility by a year—people who were diagnosed with mesothelioma before then will, sadly, be dead—and if the average payments under the scheme is expected to be £87,000, it might cost an additional £100 million to allow for full back-dating. Of course, £100 million, in my view, is not a trivial sum, but it just happens to be the same sum as the saving that my right honourable friend Ed Balls has just proposed to be made by not paying the winter fuel allowance to richer pensioners. Downing Street dismissed that and said that £100 million in public expenditure is a trivial sum. Therefore, if the Minister thinks it is unreasonable to require the industry to pay, and if it is the stated view of this Government that £100 million of public expenditure is trivial, then they should pay for the inclusion of all mesothelioma sufferers and their dependants and get on with it. I beg to move.