My Lords, it would be most convenient to deal with these amendments in their original order. If I may, I will start with the amendment moved by the noble Lord, Lord Howarth, on the scheme administrator, and then turn to the two amendments tabled by the noble Lord, Lord McKenzie, and the noble Baroness, Lady Sherlock, which relate to an oversight committee and future reports on further schemes. I will then turn to the amendment of the noble Lord, Lord Howarth, on annual performance.
Amendment 17 is intended to make certain that the body chosen to administer the scheme is able to operate in a wholly objective and unbiased manner. I know that there has been concern among noble Lords about the insurance industry’s involvement with this scheme, especially its administration. I agree that it is paramount that the administrators of a scheme that is intended to help its applicants must be able to do so in a fair way. I am confident that the necessary safeguards are in place to ensure this without the need for an amendment on the matter.
First, I remind noble Lords of the commercial procurement strategy that I spoke about earlier. The scheme administrator will be chosen through an open procurement competition that will be launched in time to meet our aim of taking the first applications in April 2014 and making payments next July. Members of the insurance industry will be allowed to tender, as will the shadow body created by the ABI. Legal specialists may also tender. The body will be chosen through this exercise according to our commercial criteria, which include being able to administer the scheme as set out by the scheme rules.
Secondly, I refer noble Lords to the scheme rules, which set out clearly every aspect of the scheme administration and specify how the administrator may or may not act. Compliance with the scheme rules will form an integral part of scheme arrangements.
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I will pick up the point made by the noble Lord, Lord Howarth, on the power of the administrator to impose conditions when making payments. As we spent a lot of time in Committee discussing, this is designed to allow the scheme’s administrator to place a payment in trust where the payment was made to a minor or to a person who lacks capacity. I am content that the selection process for our scheme administrator, in conjunction with the scheme rules, provides sufficient assurance that the scheme administrator will not be able to influence or interpret the running of the scheme. I hope that the noble Lord is reassured by this explanation, and I urge him to withdraw the amendment.
Amendment 25 proposes an oversight committee that would monitor the performance of the scheme and other related matters and report to the Secretary of State. I agree with the idea behind this amendment. The suggestion was made in Committee, and since then we have been exploring available options for some form of oversight. I spent some time looking for an existing mechanism or body already within the auspices of the DWP that I could utilise, but I have not been able to find a suitable vehicle. We are therefore continuing to explore all the options.
We face one restriction which noble Lords will appreciate more than most—on the setting up of new non-departmental public bodies—and we have to deal with that issue as we develop our options. I am working with stakeholders to identify a suitable structure that will allow for effective scrutiny of the scheme without necessarily requiring underpinning legislation.
There are several areas in this amendment that I wish to reflect on. The first is the proposed use of the oversight committee to monitor the Employers’ Liability Tracing Office. ELTO is a private company funded by the insurance industry. The Association of British Insurers is currently looking to recruit representatives from stakeholder groups to sit on the board of ELTO to monitor its performance. Having stakeholder representatives on the board of ELTO will allow them to directly influence the work of ELTO, as well as ensure that it is performing to expected standards. In addition, we expect that the technical committee will sit within ELTO. If that expectation is realised, the ELTO board, which by then should include stakeholder representatives, will be able to monitor the performance of the technical committee and report on this through the annual ELTO report. It will also allow stakeholders to identify any concerns and raise them with the DWP so that remedial action can be taken as necessary.
Next, I must reflect on the proposal in the amendment to report on the proposed electronic information gateway. There may well be merits in looking at how any gateway interacts with the scheme in order to ensure that it is supporting, rather than hindering, applications. However, we cannot yet say whether or not an electronic information gateway will be introduced, so it is not possible to work out the details of how this monitoring may be carried out. I prefer a non-legislative solution to this issue that allows us to set up a proportionate and flexible oversight committee, made up from all stakeholder groups that have a stake in the operation of the scheme. It will provide valuable support to
DWP officials as they monitor the scheme’s performance in the years ahead. We will continue to work with stakeholders on the proposals over the recess.
I now come to the amendment that would require a report to be published giving details of government plans to establish future schemes. I understand the desire for us to commit to going further and to helping as many people as we can. We have discussed before why the particular nature of mesothelioma lends itself to a discrete scheme aimed at that disease alone, and that separate schemes would be required to provide for sufferers of other diseases. While I understand and agree with the intention to keep up this momentum and for a commitment to do further work, I am afraid that I must reject this amendment. First, the complex and varied nature of other diseases would necessitate significantly more complex schemes that could take several variables into account. They are the ones that the noble Lord, Lord McKenzie, pointed to, and include the severity of the disease and the contributory factors when calculating eligibility and payment amount. The complex nature of the necessary schemes would also necessitate high costs.
Secondly, I draw noble Lords’ attention to the work of ELTO and the recent work of the FCA in conjunction with ELTO that I spoke about earlier. These two bodies have taken very positive steps towards correcting the market failure in the insurance industry. In the first year, the overall rate of successful traces increased from 46% to 71%, while the rate of successful mesothelioma traces increased from 34% to 58%. This work should not be underestimated. It may be that, in time, the work of these bodies brings further improvement until one day we get to a stage where the number of untraced records is so small that additional schemes are not needed. We need to give the measures that are in place sufficient time to show the progress that they are making.
The figures show that a much more significant improvement has been made in the overall tracing rate than in the rate of tracing mesothelioma-only cases. This shows that a scheme for mesothelioma cases is necessary, and reinforces my point that the steps we have taken already may in the fullness of time be sufficient for other diseases.
We also need to be mindful of the resource constraints within which we have to operate. The DWP will rightly focus on ensuring that the scheme operates as expected in its first years. There will undoubtedly be teething problems, as there are in any new scheme. Although we will do our utmost to minimise them, it would be naive to think that there will be none. It would therefore not be the best use of limited resources to divert them into producing a report into other schemes. As I have indicated, this would be complex to design and would be at the expense of the scheme that we have.
While I do not accept the amendment, which would commit us and future Governments to producing a formal report every year, I am alive to the need to review the situation as time goes by. Certainly, once we are able to see how much ELTO has improved things and how well the payment scheme has worked, the Government will be in a position to undertake such a review. I remind noble Lords that provision exists for
sufferers of other asbestos-related industrial diseases under the scheme in the 1979 Act. Therefore, I urge the noble Lord and the noble Baroness not to press their amendment.
The final amendment in this group, tabled by the noble Lord, Lord Howarth, would require the Secretary of State to report to Parliament on the performance of the scheme within six months of the end of each financial year. It is not necessary to include this provision. Scrutiny and reviews are already planned for the scheme, without the need for including details in legislation. As I said, I am happy to commit to making a statement to the House on the scheme’s performance.
Other amendments deal with the issue of scrutiny via some form of oversight committee. We are still working on the details, but we expect that performance information will be made available, probably online. This may be in another format. Perhaps it will be monthly rather than annual. We are looking at the matter and will consider it alongside the oversight committee. Indeed, the oversight committee may have views on the best way to make the information available. With that, I urge the noble Lord to withdraw his amendment.