With this it will be convenient to discuss the following:
Amendment 4, in clause 4, page 3, line 4, at end insert
‘but shall not be less than 100 per cent. of the average damages recovered in civil mesothelioma cases.’.
Amendment 1, page 3, line 5, at end insert
‘but shall not be less than 80 per cent of the average civil compensation recovered by mesothelioma claimants.’.
Amendment 9, page 3, line 5, at end insert
‘and shall be met by a levy on insurers of not less than 3 per cent of gross written premium during any given period.’.
Before I explain the purpose of the three amendments that stand in my name, I want to make two more general points.
First, let me identify myself and my constituents with the tributes that have been paid to my right hon. Friend Paul Goggins. My right hon. Friend has been a champion of my constituents as well as his own in all his work on issues relating to mesothelioma. Like many other Members whose constituencies are hotspots for the condition, I greatly appreciate the work that he has done over the years in trying to help those who suffer from it, and, indeed, his work more generally as a widely respected parliamentarian. I know that the whole House wishes him a speedy recovery.
Secondly, let me pay tribute to the Minister for managing to take the Bill so far forward—further forward than I managed to take the measure that I attempted to introduce when I was a Minister in the Department, which was slightly more wide ranging and was certainly brought to a halt more effectively. It is with some admiration that I pay my small tribute to the Minister—or, rather, my large tribute, for why should quantum be an issue? Actually, it is the issue in this part of the Bill, but we shall come to that shortly. I know of the pressures that the Minister has faced externally and within the broader Government over this issue, and I think he has done extremely well to get us to where we are now.
Having said that, I should explain why I tabled my three amendments. There is no position that cannot be improved with a little bit of thought, and in any event it is right to test the arguments. The amendments seek to increase the share of the amount that the arbitrator gives the victim that actually reaches the victim, and to give the legislation an earlier start date—2010 rather than 2012.
Let me address the compensation issues first. My amendment says compensation should be 100% of what is due. Nobody in the discussions we had on Second Reading and in Committee has made a moral case against giving somebody 100% of what they are entitled to. In fact, some very powerful speeches were made in this place on Second Reading on precisely this point, and I think it was my hon. Friend Mr Anderson who pointed out that within a few months the victims are going to be 100% dead, so 100% compensation does not seem unreasonable. After all, the employers paid 100% of the premiums and they thought they enjoyed 100% of the cover. Had there been recourse in law, they would have got 100% of the damages. In not one of these cases has the defence argued that to some extent the victim contributed to his or her own misfortune, and, when we think about it, what contribution could they have made that led to their own misfortune—breathing? It is a ridiculous contention. The victims are not to blame and therefore they should not have their compensation cut.
Does the right hon. Gentleman agree that it is significant that a similar scheme under the 1979 Act provides for 100% compensation for slate workers in my constituency who cannot identify the insurers of their previous employers?
The hon. Gentleman is correct, but the issue before us today is the rules for a very specific scheme that evolved through a voluntary negotiation with the industry. As we know, the Minister will say that there are financial parameters to the scheme that he cannot break.
Does my right hon. Friend agree that there have been so many injustices in this area? My brother, Bob, died of this condition. He worked for BP all his life. When it was proven he had this condition BP worked as hard as it could to give him as little as possible. The company put all that money into addressing the oil spill in America, yet that is how it treats its own employees. I feel very strongly about this, therefore, and support my right hon. Friend’s amendments absolutely, and I do so, too, because many people in the asbestos industry worked in west Yorkshire.
I care about this issue and I know my hon. Friend cares about it, too, and it is true that many Members of Parliament on both sides of the House, but especially those who represent communities that suffer disproportionately from this, know that their constituents face a desperate injustice. The burden of this condition is not shared evenly across the country. It affects our population by class; working-class constituents are far more likely to suffer from it than middle or upper-class ones. It affects our constituencies by region, too; there are regional hot spots, historically found in areas of heavy industry where people were very likely to be exposed to the dust, whether because they sprayed it on railway carriages or worked with it in the shipyards or as thermal insulation engineers and were not properly protected.
My right hon. Friend is absolutely right in what he says. I, too, want briefly to add my tribute to our right hon. Friend Paul Goggins. I know many other Members have done so, but this is a fitting time to do so.
Does my right hon. Friend Mr Brown agree that the people we are discussing served their country for many years? Barrow and Furness has the highest incidence of mesothelioma in this country. They served their country in making what they did and they deserve justice now, and this is our opportunity to give it to them.
I wholly agree with my hon. Friend. We as a House should find a way of doing more. If we cannot do it within the parameters of the scheme, we should find a way of doing more outside the parameters of the scheme.
If the right hon. Gentleman presses his amendment to a Division he will have my support, but what does he say in response to the argument that if his amendment is carried it will delay the scheme and lead to a legal challenge, which, once again, will mean many people will die before the scheme can be implemented? What is the rebuttal to that, because it is important that we have one?
I hope to make my position clear as I develop my arguments, but I want to do the best I can for the victims of this terrible condition and that will, at the end of the day, involve compromise. We are about to debate among ourselves how far we have to compromise, but I am not going to hold to some theoretically correct position if the arguments march in the opposite direction. We all have a responsibility to do what is right for the victims and if we recognise—I think as the debate progresses the majority of those taking part in it will do so—that there are injustices left unaddressed, then maybe we should return to those issues and find a way of addressing them comparable with agreements that have been made with the industry.
Will the right hon. Gentleman accept that of course the insurance industry is going to come in with a heavy hand, arguing that it will take this to court and make legal challenges and that will delay things? We had the same experience with pleural plaques legislation in Northern Ireland. The industry backed down when the legislation went through. Given that the insurance companies have reaped the benefit of these premiums over the years, is it not up to this House to make sure they pay out proper sums to the victims?
The answer to that is that they did take the premiums and prior to 2007 there was an assumption that pleural plaques cases could go against the insurers. It was only the High Court 2007 judgment that put a stop to all that. The premiums did not have to be refunded; they were just kept. The figure I have for that is over £1.4 billion held by the insurers. If companies have taken premiums for something they are never going to have to pay out for, that seems to me to be a pretty good business.
I also want to echo the comments of colleagues who have paid tribute to the work of my right hon. Friend Paul Goggins, and to pay tribute to the work done by Derbyshire asbestos support trust. It has done tremendous work in supporting asbestos victims. It had 14 new victims in the last year and they continue to come forward. I am very pleased with what my right hon. Friend Mr Brown has said about the moral case being made for these people, and I also entirely agree that we need to work these arguments out, make the moral case for these people and make sure they get justice as quickly as possible.
My hon. Friend will have his share of constituency cases, just as I do, and for the same reason: the industrial heritage of his constituency. We know that the profile of the victims is forecast to be different from the historical legacy, but it depends on the effectiveness of the protection measures we as a House have put in place. That was done with all-party consent—in fact, I think I was the Minister who moved the last set of regulations covering asbestos. We do not yet know how effective they are, however. As has been said from the Opposition Front Bench, we expect the number of cases to peak about now—in a year or so—but we do not know that that will be the case. I hope it will be, but we need to maintain our vigilance. The new cases will come from building contractors, people dismantling, rather than erecting, structures, and people who have come into contact through, perhaps, thinking they were dealing with a solid piece of material and who then hammered a nail into it or scratched it and breathed in the dust.
Exposure once is enough to cause mesothelioma and the consequences are fatal, so it is important that we take this issue seriously. I know the Minister is doing so and that the House is attempting to do so as well, but I think we should have it in the forefront of our minds that we may be returning to this issue in future.
The scheme before us today is targeted on people in a very particular position: they cannot find an insurer or they cannot trace an employer.
It is important to remember that this is about employee liability in cases where the insurer cannot be found. A great deal has been said about public liability, but this scheme would not cover that. The right hon. Gentleman is right to say that we will see more and more examples of schools in which pupils will have been affected, but that will be covered by public liability insurance. Schools and similar institutions are public places, so it will be a lot easier to find the insurer involved.
I agree wholeheartedly with the Minister on that point. My thoughts are with the young children in Leeds who found an abandoned pile of what turned out to be asbestos dust that had not yet been mixed with water and used for its purpose. The children, being children, formed it into “snowballs” and threw them at each other and breathed in the dust. Some 40 or 50 years later, their cases are now turning up as mesothelioma cases, but who is the insurer or the employer? It is difficult to say who is the responsible party. No one could possibly argue that those young children contributed to the ill health that they are suffering later in life. The Minister rightly says that we must deal effectively with such public liability cases, and I wholeheartedly support him in trying to find a way of addressing the matter.
There are two arguments against my proposal for 100% compensation. The first—and, incidentally, the weakest—is that it would incentivise the victim to see whether there was an insurer or employer against whom a case could be taken. It is argued that the prospect of getting 100% compensation, compared with 70% under the proposed scheme of last resort, would incentivise someone—whose life expectancy was now a matter of months rather than years—to go out and hunt for the insurer or employer, using whatever resources were available to them.
Let us pause and think about that. How on earth would an ordinary citizen go about tracking down those missing people? A good argument that was made in the other place was that the incentivisation should surely work the other way round. If there is to be incentivisation through paying less compensation, surely we should make the compensation not 100% but 110%, so that the administrators of the scheme, who had access to the former insurance companies’ records, would have to go hunting to determine whether it was possible to launch a case. They should be the ones to be incentivised. I am not arguing for more than 100% compensation, by the way, although I did table a proposal to that effect in Committee.
I believe that any incentivisation should work in that way, rather than suggesting that some poor old victim whose days are numbered should turn themselves into a modern-day Perry Mason and hunt down an employer that probably no longer exists—particularly in the case of a contractor—or an insurance company that has gone into receivership or will not acknowledge its liabilities. I think that the argument about incentivisation is pretty disgusting, and I do not support it.
Does the right hon. Gentleman also accept that the very people towards whom the incentive might be directed are least able to track down those organisations? The situation would be doubly unfair, because their health is not great and they do not have the resources to do the tracking.
We have a common cause in this regard. A lot of help is given by the trade unions in the shipyards—the cases involving Short’s and Harland and Wolff are exactly the same as those involving Swan Hunter—but even with that help, the balance of advantage remains with those who know the insurance industry. Those with links to the relevant trade associations have the resources to find out whether the insurers still exist, and can find that information pretty quickly these days. Some work has been done to try to improve that process, and I am grateful for the efforts made by our Government and the present one to ensure that that continues.
The principal objection to the payment of 100% compensation is that it would break the agreement that the Minister has made with the industry. I know that he does not take offence when people like me say that a lot of premiums have been taken to insure against things that the industry is now not going to have to pay out on. It would pay out if I had my way, but the law established in 2007 says that it need not do so. The pleural plaques judgment has meant that the industry is the beneficiary of the premiums that it has taken in relation to pleural plaques, although not to mesothelioma, because the cause of action has been struck down. I think I am right in saying that that does not apply in Scotland or Northern Ireland, although it certainly does in England.
I apologise for not intervening on the right hon. Gentleman earlier before he moved on to this point. I completely agree that it is spurious to argue that 100% compensation would act as an incentive. That suggestion has come from other parties, but certainly not from the Government. I want to place on record that that is not the Government’s position.
I am grateful to the Minister for that intervention, and for its tone. The incentivisation argument is a distasteful one, and I am glad that the Government are not associating themselves with it. That makes it clear that the argument is about affordability within the parameters of the scheme.
I accept that the case for 100% compensation cannot convincingly be made, even by me, if the test is affordability within the parameters of the scheme. Amendment 1 proposes a figure of 80%, and whether that would be affordable within the parameters of the scheme is a finer point. I am not giving in, however. I believe that the victims deserve 100% compensation, but I understand that, if the Government are saying that the test should be the parameters of the negotiated scheme, we will have to maximise the money available to the victims within those parameters. We have all used the useful chart produced by the Minister’s Department as the factual background to the debate. The outcome will depend on whether we factor the percentages over four years or whether we take a longer, 10-year view. The Minister will not be surprised to hear that I take the longer view because I want the victims to have more money.
In determining whether the proposals are affordable within the parameters of the scheme, the Minister needs to explain two points. First, he must explain why 80% compensation would not be affordable, on his own figures. My submission is that it would be if it were spread over a longer time period and therefore cost less per year.
The second point involves the cost of lawyers. This is set out in regulations, and the Minister is right to say that it should not be in the Bill itself, but the legal costs are going to have to be met. The estimate was £2,000 per case, but the figure then rose to £7,000. It is not clear which is the right figure. I do not want to mislead anyone; the cost will not come out of the money awarded to the victim, but it will come out of the overall cost of the scheme. The question of whether the cost is £2,000 or £7,000, or somewhere in between, will therefore make a difference. Will the Minister tell us what the correct figure is?
The figure is £7,000, and the right hon. Gentleman is right to say that the figure comes out of the overall cost of the scheme—out of the 3%. If the claimant pays less than that figure, they keep the difference—thus, it becomes part of their compensation. We discussed the reason why the figure moved in Committee and in the Lords: it was felt that £2,000 was too low and so people would not get the sort of legal advice they needed. We desperately did not want the situation that had happened with other schemes whereby the legal teams got more money out of the compensation than that—that is why the figure is £7,000. In the negotiations I have been having, the feeling has been that the actual amount will be less, so the recipients or their loved ones will get the difference.
I understand what the Minister is saying, and we all travel in hope—I certainly travel with him in hope. I hope this does not sound unduly cynical, but once the legal profession knows that a maximum of £7,000 is available for the cost of administering this, the work done and the effort put in by the individual law firms is likely to rise up towards the £7,000 ceiling. The Minister’s hope that simpler and more straightforward cases will confine themselves to a lower fee is correct, and I am with him on it, but I have the feeling that things will not work out that way. If they do not, there will be a cost on the scheme and so it will become harder to say, “We will put up the money for the victims” because the 3% ceiling will have been approached.
The second issue in this group of amendments is when the scheme should start. The Government’s proposal is to start it in 2012—backdating to the commencement of the Bill’s proceedings. My argument is that it should be backdated to the date of the consultation that led to the Bill. The consultation started under the previous Labour Government and was designed to meet exactly the same problem that the Government have identified. That consultation was on a slightly more generous scheme than this one, but of course the fruits of that consultation have not been heard and the discussions were only in their infancy when the general election interrupted proceedings.
It would be possible to make a case for a much earlier start date for a scheme of this nature. We could go back to the date of guilty knowledge for the industry as a whole, which would take us back before the second world war—if we were being really rigorous. There are certainly milestones in how our thinking has developed on these issues which go back a lot earlier than 2010. However, the Opposition Front-Bench team and I have put forward the most modest proposition that it would be possible to conceive of. We are saying that the start of consultation was the start of legitimate expectations in the minds of the victims who were being consulted and it put the industry on notice that there was to be a statutory scheme or that at least the then Government were contemplating such a scheme. This could not have come as a complete surprise to the industry.
I entirely agree with the point my right hon. Friend is making. When the consultation was taking place under the previous Labour Government, my constituents did become enthused. There is not too much to enthuse someone suffering from mesothelioma, but they were enthused because they felt there was some light at the end of the tunnel. It is, therefore, entirely appropriate that we do look back in this regard. I have no doubt that the insurance companies, which understand risk better than anybody, would already have started planning at that stage to deal with a start date going back to 2010.
My hon. Friend, who represents a community that faces exactly the same issues as mine for exactly the same reasons—wrongful exposure to asbestos dust—will have constituents raising exactly the same issues with her. She says that the industry ought to be experts in assessing risk. That is certainly true, but it did not half get it wrong over asbestos. We can all remember the crisis over asbestos liabilities that the industry went through. What relieved the burden more than any other single thing was the 2007 judgment on pleural plaques, which meant that that much larger swathe of cases was taken off the shoulders of the insurers, so the remaining insurers were better able to deal with the mesothelioma cases. We also saw some unhappy episodes relating to the work of Lloyd’s. We will perhaps not go over those again, but they did not reflect well on the industry, which is why we should be a little careful before taking everything it says to us absolutely at face value.
The other point to make for the earlier start date relates to the short life span of the victims. New drugs such as Alimta, however, are offering a few months’ extra life to the people for whom they actually work—responses to these drugs are different depending on the individual. We are talking about an early but very promising development, and I am proud of the work that Newcastle university has helped to do in the development of this intervention. This underpins the points made in our earlier debate about the need for more research. If we bring the start date back, living people could possibly just come into the scope of the scheme. In any event, their families will fall under the scheme and it is for the dependants and the families that we should make this modest decision and use the start date of the consultation, when the then Government’s intentions were clear and the industry was put on notice, rather than do the meanest thing possible and make the start date 2012. I understand that it is anticipated that an extra 600 cases, or something of that order, would be affected by such a move, but the Minister will have a better figure.
The right hon. Gentleman has alluded to the fact that I am trapped within the funding parameters of the scheme. It will be 80 million extra if we took the start date back to 2010 and that would take us outside the scheme—
I take it that when we are talking about “80 million” we are talking about money rather than about people—I know that there is a separate debate about immigration and so on.
I apologise if I have misled anyone; I was talking about the funding parameters I am restricted by. The cost of taking the date back to when the consultation started would be £80 million. One other issue that we discussed in Committee was that although the consultation rightly contained an option that the then Government were looking at taking forward, there was also an option to do nothing. That is obviously an issue, but the big issue is the money.
On that last point, I am more aware than anyone else in this place could be of the forces that would be in favour of the option to do nothing, and I have paid my tribute to the Minister for doing something rather than nothing. He should take pride in the job he has done, and I pay him all credit for it. That £80 million will be the top figure—it will be the highest possible figure that the officials believe they can give the Minister so that he can use it to dissuade the House. I am not entirely convinced by it. He cannot possibly know the real figure, because we will not know that until the cases come forward—it could well be a lot less. I would be willing to take a chance on it and to do justice to the victims. Let us stand the Minister’s argument on its head. He is inviting us to do the victims of this horrible disease—or, more likely, their families and dependants—out of £80 million. I do not want to do that, so I will want to put the proposition to the vote.
It is a pleasure to follow Mr Brown, to whose contribution I listened with interest. I rise to speak to amendment 1, which stands in my name and that of other hon. Members from all parts of the House. It is an amendment on a variation of the theme: there is not a consensus, particularly among campaigners for fairer compensation for mesothelioma victims, that the current 75% figure is acceptable. Despite the excellent efforts of the noble Lord Freud and the Minister to bring this Bill before the House, I am afraid that there is still some disappointment that the level of compensation does not go far enough. My amendment seeks to increase the level of compensation from 75% to 80%, and not to the higher percentages proposed by others. Although I recognise that 100% would be the most perfect outcome for victims, the truth is that the legislation would probably not be in front of the House today if that were the case and if that were the only option under consideration.
Although an extra 5% compensation does not sound very much, it is the equivalent of an average extra £6,000 to the victim, which is no small sum to someone trying to finalise their financial arrangements before they pass away. To those of us who seek justice on their behalf, that seems a much fairer figure, not least because they will be asked to give back 100% of the industrial disease and social security benefits that they have received as a consequence of getting mesothelioma, and that is estimated to be around £20,000 on average.
Much has already been said on that issue during previous stages of this Bill in both Houses. I will repeat what I said on Second Reading, which is that the noble
Lord Freud deserves praise for negotiating with the insurance industry and for raising the original figure for compensation from 70% to 75%. However, sources in the insurance industry told me that the noble Lord Freud himself wanted 80%, and therefore by moving this amendment today, I am merely reiterating the Minister’s previous desire for a better outcome. Then, with the support from colleagues today, he could have a parliamentary mandate to go back to the industry to start renegotiating compensation levels.
The negotiations and their subsequent outcome were based around another figure—that of the cost of the scheme to the insurance industry being no more than 3% of gross written premium. The argument for introducing the arbitrary figure of 3% was to ensure that the insurance industry would not pass on to its own customers the cost of running the scheme. In its more recent impact assessment, the Government surprisingly stated:
“It is possible that insurers will pass the cost of the scheme onto customers via increased premiums. If it did happen the impact on customers would be relatively low, estimated at 2.46% on average per year on EL insurance premiums.”
Given that inflation is currently running higher than the estimated potential increase in employers’ liability premiums as outlined in the impact assessment, I am pretty certain that the premiums will go up regardless of this scheme. That means that the insurance industry will incur no net loss as a consequence, especially as it will still receive the same Government funding incentive to smooth the first four years of the running of the scheme. The argument being put forward about the EL insurance premium rise is a bit of a red herring. The real debate is around the assumptions of the scheme. Under previous assumptions of legal costs, the scheme could have been extended to provide compensation of 80%. We have had that debate before. We had it on Second Reading and throughout the Committee stage, and the right hon. Member for Newcastle upon Tyne East has mentioned it again. Revised figures of costs—assumptions provided to the Department by insurance and personal injury lawyers—mean that 80% compensation would push the levy over a four-year period above the 3% figure, albeit marginally. However, over a 10-year period—the period I too prefer to look at given the longevity of the mesothelioma disease and when it is likely to occur—80% compensation is well below the threshold at 2.61%. Arguments over the precise nature of legal costs aside, albeit ones that were superbly made in Committee by my hon. and learned Friend Stephen Phillips, it seems incredibly unfair that two days before Second Reading in this House, assumptions were changed, and that was wholly for the convenience of the insurance industry. Unfortunately, that means that the victims of the disease will not get the extra compensation they deserve.
I have been warned that if my amendment were to be agreed, the insurance industry would walk away from providing the scheme. I am afraid to say that that is bunkum, and it would be incredibly foolish of the industry to do such a thing. It has highly paid public affairs advisers—I should know as I was one before I entered this House—who will be telling their bosses to read the mood music from the contributions to debates on this Bill in both Houses. There have been calls for the scheme to pay out compensation of 110%, 100% and 90%. There have been calls for the legislation to extend to other asbestos diseases such as pleural plaques and to include those suffering from mesothelioma from secondary sources. There have been references to the profits made by the UK’s £40 billion insurance industry and there have been expressions of disappointment in the long-term failure of the industry to deal with this matter prior to statutory intervention via this Bill.
Do I think the insurance industry will walk away from this Bill leaving tens of thousands of mesothelioma victims without compensation? We are talking about victims who contracted a fatal disease because they did the honourable thing and went to work to provide for their family and who need this scheme because of poor record keeping by the insurance industry and/or their employers. No, I do not think that will happen.
I congratulate the hon. Lady on what she has done and on what she is saying so far today. I hope that she is right, but does she not understand the track record of these insurance companies? They have challenged mesothelioma victims for decades, and I hope that we can stop them today because people are getting fed up with the way they behave.
I am grateful to the hon. Gentleman for his intervention. Decades ago, the insurance industry would have held up its hands and said that, in hindsight, it had treated victims very badly. To be fair to the bigger players in the insurance industry, they have certainly tried, over the past five to 10 years, to improve the system of compensation for victims. They have set up the Employers' Liability Tracing Office and provided funding for research. Some of those bigger insurers have started to play catch-up for the mesothelioma victims. However, I recognise the concerns expressed by the Opposition over pleural plaques. As it happens, I was part of the insurance team that ensured that pleural plaques did not become a legislative issue in this House, and I stand by that decision today. That will remain a difference of opinion that we have on a specific asbestos-related disease. Where we do need consensus is over mesothelioma. It is a fatal condition and one that will kill somebody incredibly quickly and very painfully. I want to make sure that those victims who cannot trace their insurer or employer have access to the scheme and get the most amount of compensation possible.
My hon. Friend is making an excellent speech. She said that people will be looking at this debate and, with that in mind, I hope that she understands that I also want to support her amendment this afternoon. However, the impact of the £6,000 she mentioned—the additional 5%—on the people in my constituency who have been affected, or know someone who has been affected, by this, cannot be underestimated. I entirely concur with what she said on the figure, and I hope that the Minister will listen and consider how the £6,000 will impact on the people in our areas.
I am very grateful to my hon. Friend for raising that issue. The people we represent share a similar profile and we both have former dockers in our constituencies who will contract mesothelioma in the future, so I am very grateful for his support. I know that the current and future victims will be grateful to him.
I know that the point about traditional employment and so on has been reiterated many times, but my dear brother, Robert—Rob—who died of this disease, worked in the research centre at Sunbury-on-Thames for British Petroleum, one of the leading science and technology companies in the country. As my right hon. Friend Mr Brown said, those people knew about the disease very early on. Does the hon. Lady agree that the insurance industry too often hides behind the trade association, the Association of British Insurers? We cannot get through to the real insurers as that very combatant trade association gives them cover.
I am interested in the hon. Gentleman’s first point about occupations. We must be very clear that this situation is not confined to the traditional working class, although it is more likely to be prominent as they were more exposed to asbestos than anybody else. Anyone who has been exposed to asbestos is in danger of contracting mesothelioma. On the hon. Gentleman’s second point, he must recognise that there are 150 players in the insurance industry and it is only fair that they should have a trade association that represents them. When I recently looked through the ministerial meeting list, I noticed that although the ABI was meeting with Ministers it did so with the top four insurers by its side. There are representatives in such meetings of the individual insurers as well as the trade association.
Let me go back to the question of whether the insurance industry will walk away from the Bill. I do not think that it will. It needs to be reminded that it will receive a £17 million taxpayer-funded gift to help smooth the running of the scheme for the first four years, followed by a £30 million loan. I think that that is rather ironic, given the fact that it will be part paid for by the victims through the recovery of benefits. The industry needs to be firmly reminded of that, not least because many people in this place could say what £47 million could be better spent on. We want to ensure that the mesothelioma victims get fair levels of compensation, but they will do so through Government-funded assistance to the insurance industry, which has been strongly criticised in the past for not doing enough.
Before the industry starts to cite pressures on finances because of flooding or economic circumstances—we can be sympathetic about some of the initial costs of the recent severe weather—it is important to remind it that the scheme has been long in the making. Risk analysis was done long before the Bill was introduced and reserves were allocated accordingly, which was a point made by Kate Green. That is what good companies do: they manage risk for others and for themselves.
Let me, if I may, make a party political point. We should remind the industry that since the coalition was formed it has had its corporate tax rate cut and its employee costs reduced, that steady growth in the economy has created stability, particularly for those on the FTSE, that share prices have increased and that thousands of small businesses have been created, all of which will require some form of employers’ liability insurance. Business is good for the insurance industry at the moment.
I will defend the industry for many things, but, at a time when business is growing and returns on investments are being maximised, to threaten to walk away from a scheme providing victims with compensation that they should have been able to receive through the civil procedures but cannot, through no fault of their own—a scheme that will be funded through £47 million of Government money—is utterly outrageous. I am absolutely certain that that decision would come back to haunt them later and, based on other Members’ contributions today and in the Bill’s earlier stages, would have far more punishing consequences than that proposed in the amendment.
I will press my amendment to a vote this afternoon. I had hoped that I would receive the backing of the Government but, regardless of the outcome, I urge the Minister in this House and the noble Lord Freud to return to the issue of increasing compensation for victims. If it remains at 75%, the question will not be over and could be returned to in the future. However, with cross-party consensus on 80%, not only would it be harder to increase compensation levels down the road and in the future, but it would be a welcome and worthwhile compromise for politicians, support groups and those most affected by this dreadful disease, the mesothelioma victims themselves.
I speak as a former ship worker on the Clyde. I have seen at first hand the pressure that was brought to bear on employees who worked in and around asbestos and whose jobs were threatened if they refused to work with it. It was only with the support of the trade unions and the health and safety part of those unions that we managed to get that pressure taken off the employees and to give them the protective clothing they had so long deserved.
I do not think that I am the only person in this House who has had a visit from someone who has been diagnosed with mesothelioma. We can see the desperation in their eyes when they know that they do not have long to live and the only thing that keeps them going is the fact that they can get some compensation, not for them but for their families. That is the important thing. The most graphic description of mesothelioma I have heard was from a victim who told me that it was like a tree growing inside you which eventually chokes you to death. That is the kind of death we are seeing, and it is somewhat disappointing.
My right hon. Friend Mr Brown talked about Scotland and pleural plaques. The Scottish Government took a different road and were successful in the courts in pursuing compensation for those with pleural plaques, but just for the record, no one in Scotland has received a single penny of that compensation because the insurance industry has now taken the matter through the European Court of Human Rights.
People will have different views of the insurance industry, but I personally have a very toxic view. That is based on my own experience some years ago in Scotland, where there is a different legal system. Then, when were people were diagnosed with any asbestos-related disease, their claim died with them. The insurance companies would go to court and have sitting beside them a doctor who would, from a distance, try to gauge how long the person had to live, and the companies would then find some sort of technical reason to get their case put back or delayed in the hope that they would die and their claim would die with them. That is the reason for my toxic view of the insurance industry.
I spoke about the cut-off date on Second Reading, and my opinion has in no way changed. The consultation in 2010 was extremely clear in its intention, and the industry’s very competent public relations people—perhaps Tracey Crouch might have been one of them—picked up on this issue immediately. There is no doubt that the companies have been preparing for the scheme since the day the consultation was launched, and there is no reason why we should be letting them set the agenda in this way. The rights of victims are being completely ignored by the arbitrary setting of a cut-off date in 2012. The argument that basing the legislation in 2010 is
“unlawful interference with insurers’ property rights” does not give due importance to the rights of the victims. Having more money should not buy someone more rights, though under this Government that seems to be exactly the case. Nor do I believe the argument about the initial spike in payments. Insurance companies would have put money aside to alleviate the risk of making those payments, and even if they did not, the payments would be a drop in the ocean for this multi-billion-pound industry, which can easily afford to make them.
Between February 2010 and
My hon. Friend and I come from the same area of the Clyde, which has had a long tradition of shipbuilding, and we know that victims of asbestos-related illnesses are still being identified. Does he agree that perhaps the insurance industry is looking ahead and estimating that what we had hoped would be the peak in the number of these victims is not the peak? In fact, still to this day, GPs on the Clyde actively ask people who go to see them with chest complaints, “Where did you work? Did you work near asbestos?” Is not that why the insurance companies are so reluctant?
My hon. Friend and neighbour is absolutely right. He, like me and many people who worked in the industrial sector, whether it be in the shipyards, in the mines or wherever, live with the constant fear that a cough could develop into something more worrying like mesothelioma. In the industrial sector, regardless of the part of the country we come from, that is something we have to live with on a daily basis.
In my constituency the kinds of activities that tended to provoke this condition, such as dock-related activities, declined some time ago. That was not, however, many decades ago, so this is still an issue for people in my constituency. Does my hon. Friend agree that months, let alone two years—
Order. Unfortunately, interventions have to be very short, because others want to speak. If interventions could be shortened, that would help.
My hon. Friend is absolutely right. The docks are another area where mesothelioma was a constant threat and problem, particularly in places such as Leith, which is a big dock area.
On compensation, as I have said, I think the numbers are still to peak. There is a mesothelioma problem in schools and I think the problem will only get worse. It will be interesting to hear what the insurance companies have to say about teachers and others in schools who will suffer from this horrible disease.
On the levels of payment, it is totally unjust and unfair that victims of mesothelioma whose documents were either lost or destroyed will receive less than 100% of the average compensation. In an earlier debate we argued that the level should be set at 90% of the average. A precedent has already been set in the Financial Services Compensation Scheme, which covers the liabilities of insolvent insurers in circumstances involving compulsory insurance.
We support the cross-party amendment 1, which would set a lower level of 80%, although it is not ideal. I think that amendment 4, which would set the level at 100%, is the fairest solution and perhaps that is what we would seek in a different and better political environment. I think that the insurance companies, as opposed to the victims, could agree to set the level at 80%. The 90% level was already affordable, as it was still within the 3% levy on gross written premiums with which not only the Government, but the industry, is happy. If we set the level at 80%, I am sure the insurance industry would not only be happy, but feel as though it had got a good deal. At least it would put an extra £6,200 in the pockets of victims. Morally, 80% is the absolute bare minimum the Government should be aiming for.
My hon. Friend is making a good point about the moral limit, but does he agree that the whole concept of contributory negligence and the apportionment of damages suggests that the victim is in some way responsible for the damage caused? That is anathema in these circumstances: these people are totally and utterly innocent, but they will walk away with less than what they truly deserve.
My hon. Friend is absolutely right. We now live in a society in which some of this country’s most vulnerable people are being asked to pay the price with regard to not only mesothelioma, but other areas relating to quality of life.
My hon. Friend is making some excellent points. The clawback provisions mean that victims will have to pay back 100% of previously paid benefits. Is there not an inconsistency in the fact that the state seems to have a greater demand of 100% clawback, whereas the victims will get only 75% of the compensation due to them?
My hon. Friend is absolutely right. Do we really aspire to live in the kind of society that does that to people? They needed those benefits for various reasons, but now 100% of them will be clawed back.
As they say in the best pantomimes, the hon. Gentleman is absolutely right—you could not make it up. It is incredible that the clawed back money goes to the insurance company.
To move on to ring-fencing and the 3% levy, insurance companies will get a good deal from the Bill, as I have said. Even if they keep paying a 3% levy until no more mesothelioma cases exist, it will be a good deal. It is therefore completely right that the 3% should be ring-fenced. Colleagues have already mentioned many ways in which the Bill falls short, but the extra money that ring-fencing the levy gives could pay for some of those shortfalls: to compensate victims of other asbestos-related diseases, to research a cure or, indeed, to increase the fund payments to a much fairer 100% of the average compensation. The insurance industry well and truly expects to pay 3%, and is financially prepared to do so. There is no reason to let it get away with paying less.
I well understand that the Minister, who is a decent man, claims to have done his best on the issue, but I still think that there is room for improvement. I encourage him to continue to pursue insurance companies for a better deal for those who deserve it—the victims and their families.
I do not intend to delay the House for too long. Many of the points I wanted to make have already been very eloquently made by my hon. Friend Tracey Crouch. I pay tribute to the Minister and the Government for introducing the Bill, which I support.
As has been mentioned, mesothelioma is an industrial disease, but I assure the House that in my constituency—constituencies do not get more rural than the rolling hills of north Derbyshire—the incidence level of mesothelioma is higher than the national level owing to some of the industries operating there. As all of us in the Chamber and more widely know, through casework and from friends and relations, mesothelioma is a truly dreadful condition that causes great pain and is incurable.
I added my name to amendment 1, which I am now speaking to, because I think that 70% to 75% represents progress. In an ideal world, 100% would be the ultimate progress that we would want. However, the 80% figure is a good compromise: it is viable, doable and, as other hon. Members have highlighted, achievable. I do not think that insurance companies will walk away. In the world we live in today, more companies are concerned about their reputation, and given the cross-party strength of feeling in the House about compensation for mesothelioma, it would be reputational suicide for insurance companies to walk away now. I think that we can squeeze that extra 5% out of them, which would be better in the pockets of the victims of this dreadful condition than anywhere else.
I am proud that the Government have gripped the issue, but if we agreed to amendment 1, they could grip it just a little harder. That extra grip would make the mesothelioma sufferers’ prognosis that little bit better and I for one, as a Member representing a constituency affected by this dreadful condition, would be that little bit prouder and stand that little bit taller after what I had done here today.
Like other hon. Members, I start by mentioning my right hon. Friend Paul Goggins, who has done much on this subject. He organises an annual memorial event in Greater Manchester, in the city centre, and as a Greater Manchester Member of Parliament I have always been pleased to attend, so I thank him for his work in that regard. I pass on my best wishes to his family, and I hope he will be well again soon.
Hon. Members will be aware that Rochdale was home to the world’s biggest asbestos factory—Turner and Newall dominated the town for many years—and it is fair to say that the legacy of asbestos still haunts our town and its people. Walking around my constituency, it is hard to find anyone who has not been affected in some way by asbestos, whether through family members, friends or colleagues, many of whom have been affected by asbestos-related diseases. Asbestos destroys lives and breaks families. In Rochdale, it has left a community legacy in the form of a massive derelict factory site that nobody is prepared to remediate effectively.
The lack of justice and compensation for many of the victims of asbestos is a scandal that has lasted for far too long. I am pleased that the Bill is before us, but we must go further than what is proposed. I believe that the Bill falls woefully short of providing adequate compensation for the victims.
The Bill contains a number of arbitrary decisions that I think are designed purely to appease the insurance industry. First and foremost among those is the cut-off date for diagnosis,
Secondly, the Bill is very limited in terms of who it supports and helps. It is being spun as a victory for asbestos sufferers, but it is limited to covering just mesothelioma victims and it will not affect people who have come into contact with asbestos domestically. That is a cause for concern.
My final point is about the level of compensation. Frankly, 75% is insulting. We must remember that the Government were proposing a 70% limit. My opinion is that a fair level of compensation would be 100%, as my right hon. Friend the Member for Newcastle upon Tyne East suggested. I am prepared to support an 80% level. That modest increase would at least give some comfort to the victims.
All those arbitrary decisions raise serious questions about the Bill. I get the impression that the Government are good at standing up for the strong insurance industry, but weak when it comes to standing up for the victims of asbestos.
I will finish by referring to the case of a lady called Mrs Nellie Kershaw. She started work as an asbestos spinner at the age of 12 in the Turner and Newall factory in Rochdale. In 1922, she became too sick to work and was diagnosed by a local doctor as suffering from asbestos poisoning. As it was an occupational illness, she was ineligible for sickness benefit from a local scheme to which she had contributed. Her husband, Frank, who was having to look after the couple’s two children, pleaded with her employers for assistance. They refused to offer any help and she died in poverty on
Nellie Kershaw was the first person in this country to be diagnosed with asbestosis. She and her family were left with absolutely nothing. Fast-forward 90 years and we are here today quibbling over who should and who should not receive compensation and over how much the compensation should be. As it stands, the Bill does the minimum possible to support asbestos victims.
I am listening intently to the hon. Gentleman’s comments, but I am really disappointed by some of them. I understand him wanting to get more compensation, but the Bill would not be here today without Lord Freud fighting to get time, and this Government getting it on the statute book, which, as Mr Brown said, is difficult and had not been done previously. Most people who know me know I do not do party politics, but I cannot sit back and say that we have not done our bit because we are doing our bit—that is why we are here today.
I accept the Minister’s intervention and I am not trying to be overly party political about the issue. As I said earlier, I accept that progress has been made, which I welcome, but I am pushing for more intervention from the Government, and for a better compensation scheme for my constituents and those across the country who deserve more from this Bill. I hope we can achieve that today.
It has been a decent debate this afternoon. I am not sure whether we are here to discuss how perfect the Bill could be, or who would be the best recipient of the measures in it, but I think we are here for fairness and justice for individuals who have suffered greatly as a result of mesothelioma. There may be a difference of opinion about who we should be looking after—should we be looking after the insurance companies, or should we look after those who are suffering greatly as a result of mesothelioma?
Right through the Bill, from First Reading until now, the costs of the insurance companies have dominated the debate, yet we rarely discuss the individuals who have suffered and who have died. We rarely discuss the victims or those who are perhaps sitting on the sofa at home watching this debate now. As I am sure everyone is aware, once someone has been diagnosed with mesothelioma, they have a very short time to live. I just want people to be fair; I am not asking for the world, but I think that as politicians we have the right to be fair to ordinary people. Is anything wrong with being fair? Sometime we short change people, which is not just or fair.
My hon. Friend Jim Sheridan spoke in a previous debate of someone who went to see him and said, “This is horrendous; it is like a tree growing inside, and it eventually chokes you. It eventually kills you.” That is what we should be thinking about and discussing in lots more detail, not the fact that insurance companies have come forward with a potential 3% levy. What about those who are dying? What about the people who are suffering? Once they have been to the doctor, their life has ended. Let us start discussing those people.
My hon. Friend is being his normal forthright self. Does he feel—as I do—that he is in the middle of a negotiation, when, like me, he expected to be making the law of the land? We are basically saying that we make the law of the land if the insurance companies will agree to it. It is unbelievable.
I totally agree with my hon. Friend. I have been through the Bill and I am puzzled by the fact that there is a threat—if we do not agree to something that is a lot less than what people deserve, the insurance companies will walk away. I always thought that if the Government pushed through a Bill that said 100%, it would be 100%. If that is what the Bill says, surely that is what it means and what the insurance companies will have to do. From what has been said throughout the stages of the Bill, it appears that the insurance companies are running this, not Parliament. That concerns me because there have been great discussions and great debates on all sides, but I am yet to hear any persuasive reason why the victims should not receive 100% of their compensation.
My hon. Friend is making a powerful argument. The very lifeblood of insurance companies is the assessment and measurement of risk, so would it not be reasonable to have expected them, from the start of the consultation in 2010, to set aside a contingency fund to meet the full liability of the victims’ claims?
That possibly should have been considered, but we must remember that these insurance companies do not lack finance. They have had the money already, so why should we accept that those victims and sufferers—and their families and carers—should have anything less than 100% compensation? The claimants under the scheme have to meet the same standards of evidence and burden of proof as those who make successful civil claims. The only difference is that those who make a successful civil claim get 100% of the compensation.
The benevolence of insurers has been raised. Should we clap our hands or embrace the insurance companies because they have done a marvellous job with regard to the people we represent? Should we class them at this time of year as industrial Santa Clauses with presents for people who might not be here next year? Should we applaud the companies’ efforts? I think not. The insurers collected premiums in full and invested them for decades.
The hon. Member is making a passionate speech, as he did on Second Reading, and he is rightly standing up for his constituents. I have to tell him that the insurers did not come happily to the table to have this discussion. When the discussions with Lord Freud started, they were told to come, and the negotiations were based on what we could get agreement on without putting a further burden on business—in other words, the 3% levy does not go on to new business. I heard what my hon. Friend Tracey Crouch said, and we will take a close look at that. We have to look at the context. Nothing had been done for so long, but now something is being done and the insurance companies are not happy about it.
Every hon. Member who has spoken today understands that the insurance companies had to be dragged to the table, because contribution after contribution has cited examples where the first thing an insurance company does after an individual has been diagnosed with mesothelioma is run away and deny it for as long as possible in the hope that the problem goes away. In Committee, I applauded the work done by successive Governments in getting the Bill to this stage. We are just a little too far away from this Bill being absolutely fantastic for mesothelioma sufferers. Three or four points mean that it is nowhere as good as it could be, and some great arguments have been made today on how to bridge the gap.
I return to the point that the insurance companies are not companies that are just surviving. They have made profits over generations—10, 20, 30, 40 and 50 years. They took the premiums and invested the money. Never mind contingency funds, the funds should be there—unless, of course, the money has been paid out in dividends or in other ways. That means that the money that should have been there for mesothelioma sufferers is not there any more because it has been given to shareholders. That is simply a point. The insurers paid out nothing on the untraced policies that they lost or destroyed. Again, that is not the fault of the people who are suffering—it is not their difficulty. Remember, the only thing wrong that they have done is to attend the workplace. For goodness’ sake, we cannot forget that that is the main point.
Does my hon. Friend accept that in terms of events in the workplace we are talking about identical events with a different period of maturity into full-blown mesothelioma? Some people with identical circumstances will not qualify, while others will. Will he speculate on the issues that that may cause? Someone may have been through the same process as the person sitting next to them in the workplace—in the case of Southampton, handling blue asbestos in the docks, bailing it up and throwing on to the dockside—with the disease appearing many years later over different periods for different people—
Order. We need shorter interventions—there are quite a lot of other speakers to get in. Interventions are important, but they must be shorter.
This issue has been explained. This is not just a shipyard, mining or other heavy industry problem; this disease can be contracted in the classroom. We really need to look at the position with asbestos in schools. I fear that not enough data have been kept on children over the years. People never believe, 30 or 40 years later, that they have mesothelioma. They think back to what type of employment could have caused it, but it could have started in school. I accept my hon. Friend’s point.
Lloyd’s made £2.7 billion between January and June 2012. Royal and Sun Alliance made £233 million last year. Aviva, between January and June 2013, made £605 million. That is just three companies. They are awash with finance. Believe me, Mr Deputy Speaker, they intend to continue to be awash with finance.
The regulatory impact assessment estimated that approximately 6,000 mesothelioma sufferers lost about £800 million in compensation due to untraced insurance. If we add that to the cost to the victims of other asbestos diseases, and the deal cooked up between the Government and their friends in the insurance industry, that represents a saving to insurers of about £1 billion. That is absolutely scandalous.
Does my hon. Friend agree that in 2007, as a result of the decision on pleural plaques, the insurance companies were handed a windfall of £1.4 billion that they were not expecting?
That is absolutely true, and that strengthens the argument put forward with regard to the apparent finances and wealth of the people who are threatening to walk away if they are asked to pay the right amount of compensation, or even more than 75% of it.
There are other examples where compensation has been paid at 100% or at 90%. The pneumoconiosis scheme in the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 pays 100% compensation and the Financial Services Compensation Scheme paid 90% to asbestos sufferers, so there are examples.
On the cut-off date, which my hon. Friend Dr Whitehead mentioned, why on earth is
May I politely correct the hon. Gentleman? The date in 2010 was when the previous Administration issued the consultation document, not when the Bill started.
Yes, the consultation document was issued in 2010, but the cut-off date in the Bill will be
It comes down to whose side we are on. As politicians, we face tough choices every day of the week. Are we on the side of the victim who will sadly pass on within months, or are we on the side of the insurance companies, which, as the Minister said, had to be dragged to the table to pay any compensation at all? The insurance companies are getting £17 million from the Government just to start the scheme, and it has been agreed they will get a further £30 million from them through some sort of borrowing arrangement.
In conclusion, when someone with mesothelioma who is soon to pass on comes to one of our surgeries and we explain that the insurance companies have only to pay 75% compensation, I wonder what their reaction will be. It is not fair, it is not just, and it is not acceptable. Wherever there is 100% liability, there should be 100% payment.
It is a privilege to follow Ian Lavery. He has brought the human side of this debate into the Chamber, which is important, because while we can throw around the percentages that insurance companies will have to pay, cut-off dates and so on, we need to remember that we are dealing with people who have suffered greatly as a result of their employers’ negligence, not their own, and whose suffering will inevitably result in death.
At the outset, I also pay tribute to Paul Goggins, who is fondly remembered in Northern Ireland, where he served as a Minister. Since he left office, he has always taken a great interest in the affairs of Northern Ireland. I also pay tribute to the Minister, although I am critical of much of the Bill. I fully understand the pressures he came under when introducing it.
The insurance companies are not easy to deal with and when it comes to paying out, they are bullies. I had a similar experience in Northern Ireland when we were taking through legislation to overturn the House of Lords decision on pleural plaques. Officials advised that we should not do it as we would have a hard time. The insurance companies jumped up and down, threatening all kinds of legal action. They threatened to challenge the legislation in Northern Ireland; the argument was that we would be raising expectations and that the measure would be delayed for years. But at the end of the day, when it was seen that there was a determination to push it through—and it did go through—it was, ironically, the Attorney General for Northern Ireland who challenged it in the courts, and lost. [Hon. Members: “Your friend?”] My friend, yes.
I have had my own experiences with the Attorney General when I was a Minister in Northern Ireland; I am sure other colleagues have as well. The difference between what is happening here today and what happened in Northern Ireland was that we have done a deal with the insurance companies before proposing the Bill rather than, as in the negotiations on pleural plaques, there not being a deal, so the legislation had to be forced through. That is the real difference; we have an agreement that will not affect businesses or premiums and will allow us to get the money through.
I want to come on to that agreement. As Ian Lavery said, at the end of the day this Parliament sets the rules by which insurance companies and everybody else must abide. I understand that the Minister has had the discussions with the insurance companies. I have to say that I think that the companies have come out with a very good deal. Do not forget; despite the fact that we are dealing with people who perhaps cannot trace where the insurance was with their companies, that does not mean that, in most cases, the insurance was not paid. The premiums went to the insurance companies. They benefited from the money and they have not paid it out when the claims were made. This is not a case of there never being any insurance paid, in many cases. In most cases, the insurance was paid and the insurance companies have escaped.
Secondly, as has been pointed out, as a result of House of Lords decisions and other decisions on claims that could have been paid for pleural plaques, for example, the insurance companies have got a windfall. We can debate the size of that windfall but figures up to £1.4 billion have been thrown around. On top of that, the Government will underwrite part of the cost; £17 million plus another £30 million loan to them. Then, the companies will only have to pay out 75%, and 50% of the people who should have been covered—because they did experience health problems as a result of exposure to asbestos—are not even covered. I reckon that that is a very good deal for the companies. If this House were to say, “We think that the deal struck is overly generous and we are going to make amendments to the Bill to compensate for the overly generous deal that was struck,” I doubt very much that the insurance companies would walk away or that they would challenge it, especially as the mood of the House is that many people who should have been included in this are not, and that there are levels of compensation that should have been paid that are not being paid. Those are the kinds of arguments that I have found persuasive when listening to the arguments for the amendments.
The Minister is the one who has sat face to face across the table with the insurance companies. It is his judgement that the insurance companies will not buy any strengthening of the Bill. Given the generosity of the deal and that insurance companies try to eyeball Ministers and see who blinks first, it is my judgement that if the Government stand firm, we can get a better deal for those who suffer enormously as a result of negligence.
Surely the nature of the insurance business in this respect is that the risk is spread over a whole range of different liabilities. The very fact that the insurance companies have done that means that they should pay up when they ought to. They are not doing so; they are trying to wriggle out of it.
I wanted to come on to that point, so I will jump to it now. The risk is, of course, fairly minimal in any case. First, it has already been covered and, secondly, I heard the Minister say that this cannot be passed on through additional premiums on employers’ liability insurance. No Minister can guarantee that when insurance premiums go up, some of the marginal increase is not to enable the additional costs to be recouped by the insurance industry. I do not know what kind of scrutiny of employers’ liability insurance premiums the
Minister intends to introduce to ensure that the costs are not passed on, but in any case, as Tracey Crouch has pointed out, the insurance companies will already have made provision for this legislation.
My hon. Friend is making a compelling case. He is absolutely right about how the insurance companies will operate in this field. They not only insure the initial risk, but sell it on. We can be assured that they are definitely covered, and I believe that the Minister should take cognisance of that in making his decision.
I thank my hon. Friend.
Let me deal with the two amendments that deal with whether the compensation level is acceptable. For 28 years, I represented east Belfast—the inner part within the shadow of the shipyard—on Belfast city council, and I saw and represented, at disability living allowance tribunals and so forth, many people who had suffered as a result of exposure to asbestos in the shipyard. I have seen the suffering that they went through. I have gone into their houses and seen people who could hardly walk across a 12-foot wide living room, who could not climb the stairs and who knew that they were in for a horrible and painful death. Those are the sort of people we are talking about, and that is the outcome of the exposure to which they have been subjected. That is what we are dealing with.
I must say that I find it grossly offensive that people who qualify for 75% compensation under this scheme will have 100% of their benefits taken from them, yet that will be paid back to the insurance companies to try to “relieve the burden” on companies that already have the money to cover the costs. We should bear that in mind when we look at amendments 1 and 4, which provide for increasing the level of compensation.
We are very much focusing on what happened to the individuals who had the disease, but perhaps we have not focused enough on the ripple effect on the families that comes out of that. Does my hon. Friend agree that it is not just individuals, but families and wider family circles that are involved, and that because of that, the squeeze should be put on the insurance companies to ensure that they pay more? Should not the Minister do that as well?
We should, of course, bear in mind what it is like for any wife, husband or child who sees their father, mother or son going through the sort of agonies they have to endure when they die from this disease.
Let me deal with the issue of the cut-off date. I understand that cut-off dates are difficult: how should we choose them? No matter what is chosen, some people are going to feel aggrieved or short-changed. The proposer of the amendment spoke about a range of cut-off dates, going right back to before the war when people first knew that exposure to asbestos led to a terrible disease and death. However, there must be some logic to the cut-off dates that we set, and, in seeking that logic, we should be asking how we can apply it in order to encompass as many people as possible.
Although I am not particularly happy with it, there is logic in the argument for a cut-off date of 2010, when expectations were first raised and the insurance industry was first notified, and when preparations for the payment of compensation could begin. The Minister said that setting a date of 2010 would add £80 million to the cost of the Bill, but I should like him to explain how he arrived at that figure. Given the 75%, the cost of payments will be £343 million over the next 10 years. It has been accepted—and I saw the Minister nod on a number of occasions when this was mentioned—that the bulk of cases will arise in future years. How can we have a figure of £343 million for the next 10 years, during which we expect the bulk of cases to arise, and a figure of £80 million for the two years preceding 2012? Those figures simply do not add up. I should be happy to hear the Minister’s explanation now, or, if he prefers, when he sums up the debate, but I suspect that the figure has been over-inflated and gold-plated in an attempt to establish arguments for not setting a date of 2010, presumably because the insurance companies will ensure that that does not happen.
I will happily give way to the Minister if he can provide an explanation. However, I should point out to him that even if we did incur an additional £80 million—and I suspect that it will be nowhere near £80 million, because £80 million does not seem logical—according to the Minister’s own figures, that would add 0.53% to the premiums that the companies would have to provide, while also encompassing, as we have heard, 700 people who are currently not covered by the scheme.
I realise that much of what I have said has been negative. I understand the pressures that the Minister is under, and I believe that the attitude that he has taken today shows that he genuinely wants to help those who suffer from this disease and will die as a result of it. However, I also believe that more can be done. I believe that logic is on the side of those who have tabled the amendments, and I trust that the House will support them when they are put to a vote.
I shall speak only briefly.
I support all Members on both sides of the House who are pushing for more in this deal. As I said in an intervention earlier, Barrow contains the largest number of mesothelioma victims in the country. In most of those cases, the employer can be traced, because it was the Vickers shipyard. However, the families of the victims—wives who have seen their husbands die, children who have seen their fathers, and in some instances their mothers, experience that horrible, horrible death—are standing in solidarity with other families throughout the country, just as they have throughout the struggle for appropriate compensation that has continued for far too long.
Let us be clear about the fact that there can be no total fairness in this regard. If there were total fairness, people who went to work to do an honest job, to earn a living, to build ships and to work in industry would not have caught this disease and died in terrible ways, or caught a disease which is a ticking time bomb and which hangs over their lives now. Do we want to see premiums go up for current payers of insurance cover? No of course we do not, but it is absolutely clear that the victims who have waited so long for compensation should not be the ones who continue to bear the financial cost and penalty of this.
The Minister and his predecessors deserve some credit for taking on the consultation that the previous Government set out. As I have said before in the Chamber, my hon. Friends who were here before me pushed for this for so many years under the last Government and they should have got further faster, but that was not for want of trying by Ministers.
My hon. Friend is making a powerful point, but does he agree that premiums should not be increased, because premiums have already been paid to insurance companies who made huge profits and distributed them to shareholders? They have had the money and they should pay out, as that is what happens with an insurance scheme.
My hon. Friend is absolutely right. Insurance companies now have an opportunity to do the right thing and to be seen to be doing the right thing, and I hope they take it.
I said the Minister deserved some credit but I think he has blinked too early in this negotiation. We have all said we recognise the pressures he is under, but there are a lot of Members of this House who know a bit more about negotiations than I do and they will all tell him, just as I am about to do, that people do not tend to go into a negotiation saying, “Well, we’re going to offer this now, but, to be honest, there’s a bit further we could go so just push us a bit more and we’ll be prepared to give you a bit more.” They always say, “This is the last offer and we are not going to go further.”
If that was what happened I would agree with the hon. Gentleman, but that is not what happened. The figure started at 70 and now we are at 75. I have never blinked early in my life, and nor did Lord Freud.
Does my hon. Friend agree that the deal that has been struck is allowing the insurance companies to renege on their commitment to these victims, and, not only that, but perhaps we are seeing a precedent being set for industries who are yet to leave their legacy of industrial victims?
My hon. Friend is right and that does not leave the insurance companies doing sufficient.
Of course time is a factor, and we do not live in an ideal world. Today we will probably not achieve giving these people everything that ought to be given to them, and God knows they have waited far too long already, but we should all thank Tracey Crouch for her tenacity. She has brought her considerable expertise to bear on this. I am sure her former friends and colleagues in the insurance industry think of her as a poacher turned gamekeeper—
Perhaps it is the other way round in this instance. Her expertise and inside knowledge has enabled the way in which the insurance companies work to be exposed in the House today. Some of us will struggle to see the logic of the 3% cut-off. If we stretch this and have a longer period for making the pay-outs over the next decade, even by the parameters the insurance industry has set itself, the figure will still come in at 3%.
We have shown today that we can go further and I really hope that, even at this late stage, the Minister will listen to the arguments made in this House and improve what is on offer for the victims of this awful, horrible disease.
I will try to keep my voice going if I can. I appreciate the work the Minister has done but this debate saddens me. We have got a situation where employer liability was paid to these insurance companies. They have had their money and they have run with it. People have died, and that was not a surprise. We have known for a century that asbestos kills people, so the fact that people would need compensation was not a surprise. The whole argument about the cut-off date, and that we cannot just spring this on the insurance companies, is nonsense. Looking back over the last decade, at the Fairchild rules, the Barker rules and the Rothwell rules, we can see that those were all cases in which the industry tried to get out of its responsibilities.
I raised this point with the Prime Minister on
“I will obviously look at what he has to say”.—[Hansard, 18 December 2013; Vol. 572, c. 732.]
I understand the time constraints that he has been under since then, but will the Minister tell us whether the Prime Minister has had a chance to look at the Bill? Where has the Prime Minister been to take that look? Has he been to the TUC? The trade unions have supported people through this morass for decades. Has he been to the asbestos victim support groups, including those who have been here today, who have real-life experience of these matters? Has he been to the employment lawyers who have sat with the people while they have died, and with their families?
As a trade unionist myself, I would have expected the TUC to contact me for a discussion, but it has not done so. Other groups, including victim support groups have. This is an interesting situation. I would have been more than happy to speak to the TUC, but it did not knock on my door.
I thank the Minister for his intervention, but I am talking about what the Prime Minister has done since he made a promise to the House from the Dispatch Box to look into the situation, knowing that the Bill was coming back to the House today.
Perhaps the Prime Minister has looked at what the employment lawyers have been dealing with over the years. Or perhaps he has done the other thing, and spoken to the people who have set the parameters for this debate: the people in the insurance companies. After all, he knows them all. They have bankrolled his party for decades, and they have bankrolled his constituency and those of hundreds of Conservative Members across the country. If a trade union had exerted that much influence, we on this side of the House would have been nailed to the wall. The Prime Minister knows the insurance industry well enough to have appointed the Association of British Insurers to lead the consultation. My hon. Friend John Woodcock talked about gamekeepers and poachers a moment ago. If this is not the most glaring example of that, I do not know what is.
At the end of the day, however, the Prime Minister could have gone somewhere much closer to look into this matter. If he had gone to his constituency office, he would have found a document in his in-tray that was sent to every one of us as constituency MPs. It is from the Asbestos Victims Support Groups Forum UK, and it is entitled “The Mesothelioma Bill [HL]—the Victims’ View”. I shall read out a few examples from across the country.
A constituent from Stockton North asks:
“After being robbed of my husband and father of two sons why am I now being robbed of compensation for my children”?
A constituent from Birmingham, Selly Oak states:
“I hope you never have to watch a loved one on oxygen fighting to get his breath, carrying it around to be able to live, or should I say exist. You have no idea what mesothelioma sufferers go through.”
A lady from Halesowen says:
“I watched my husband suffer for 3 years and then his horrific end to this illness. I’m sure that if the Ministers in Parliament witnessed this they would change the Bill without any hesitation”.
A lady from Eltham states:
“My husband was murdered. His name was Alan. My husband died aged 58 because he went to work every day in places riddled with asbestos.”
Mrs Barker from Staffordshire Moorlands says:”
“If you haven’t seen a man die of mesothelioma like I saw my husband in hospital then maybe you ought to go to a hospital. To see him go from a healthy active man to nothing, skin and bone, or anyone diagnosed with mesothelioma fall to pieces…is heart-wrenching.”
Mrs Bell from Telford states:
“My husband died within 2 months of diagnosis of mesothelioma. He was a strong, healthy man brought down to a weak, skeletal figure in that short time. Watching someone you love reduced to such a state is soul destroying.”
Mrs Barclay from Cannock Chase says:
“Come and spend time watching someone you love struggle to walk because of pain and lack of oxygen. My husband was 6 ft 2 in tall and now he is bent double struggling to walk.”
But the Prime Minister need not even have gone there; he could have gone to visit Mr Larrie Lewington, who lives in Witney and who said:
“I’m disgusted because 90% of the work I did was for people like the Ministry of Defence, police and hospitals. I now have this death sentence hanging over me for helping the government and they are trying to reduce the amount of money that I deserve. It’s an absolute insult. I could have had another 20 years left, everything else is perfectly healthy except this horrible disease. No amount of money will ever compensate what this has done to me and my family but it will help, and give me peace of mind that I can live without worry for the rest of my time.”
That is the real story here. It is not about whether the insurance companies can afford this or not; it is about the moral duty of the people in this House to do the right thing and not be told, “We might have to put the insurance bill up and some businesses will be wobbling.” We do things in this House every day of the week that put businesses, people, trade unions and every other organisation in the country under pressure, yet somehow we are saying that because we have this deal we should not put these people under pressure. There is absolutely no excuse for what is going on here today. The least that should be done is that we should start the scheme from 2010, because that is the last point when insurers can say, “We did not realise we were going to have to face up to this.” They should be made to face up to it. They have had their money and they ran with it. They should be caught, brought back to book and made to pay the proper compensation—anything below 100% is a disgrace.
The other clear disgrace—I am glad that the Minister of State, Department for Work and Pensions, Steve Webb is in his place—is the concept that somehow the Government can claw back 100% of benefits from people and yet give only 70% compensation. Where on earth has that come from? Where is the morality in that? Has anybody made the case to say that that is fair? It is obviously wrong. Somebody who goes to the courts because the employer is identifiable will get, on average, £154,000, whereas under this scheme the most somebody will get, even though they have to go through all the same hoops, except that they do not have an identified employer or insurance company, is £115,000. So they are already £39,000 worse off. Then 100% of the benefit they had is going to be clawed back because they are lying on their death bed—it stinks! We have to put this right. If it is not put right today, we need to continue on it because this is not the end of the matter. If it is not put right in this Parliament, I hope that when Labour comes to power in the next one we will resolve it.
It is a pleasure to follow Mr Anderson and all the other hon. Members who have spoken most eloquently about this terrible disease in support of the proposal made by Mr Brown, which my party and I support. Andrew Bingham said that it seemed unlikely that he would be so concerned about mesothelioma, given that he represents a rural area, and the same applies to me; what does mesothelioma mean to us in rural Arfon?
In the early 1960s, a Ferodo factory was established just outside my home town of Caernarfon. The slate industry was dying at the time, and many slate workers were affected with the dust disease that led to the 1979 Act to which I referred earlier in an intervention. At the time, people believed in economic planning and the plan was to establish a large factory in the constituency to mop up the unemployment arising subsequent to the closure of the slate industry. Ironically, the factory was that of the Ferodo firm, which then used asbestos in the production of brake linings, leading to cases of mesothelioma in my constituency.
I will be brief because the arguments have been very well made this afternoon by a variety of hon. Members on both sides of the House, and I pay tribute to Tracey Crouch for her interesting and well informed speech. As has been said, the scheme is being set up for individuals who have not only been diagnosed with a terminal illness, but who have been suffering the misfortune of being unable to trace their employer’s insurers. It is plainly unjust that these claimants should automatically lose a significant percentage of the compensation that is rightly theirs through no fault of their own. The industry has argued that mesothelioma claimants should be encouraged to look at all other avenues before making a claim under the scheme. At a meeting I had some months ago with insurers, that point was made most strongly.
It is the Government who are saying that a victim must do everything they possibly can to ensure they get a claim against an insurance company before they approach the scheme, because the scheme is a fund of last resort.
I stand corrected. However, that argument was made to me by representatives of the insurance industry when I met them on this issue. I understand the argument that it would spur people on to take any action they can and that the fund should be a matter of last resort, but it seems that we are in danger of giving the impression that the Government are heedless of the bitter realities and the ferocity of this disease. I am sure that the Minister does not see it that way, but that is the impression that might be given to sufferers in the short time that is available from diagnosis to the outcome. There are also cruel pressures on their families. As we have already heard, sufferers can die very shortly after being diagnosed, which leaves their families with little time to seek more positive avenues of compensation. There is the matter of basic humanity here. Should we expect people to use their precious final months of life to pursue these legal means of tracing their previous employers’ insurers when the fault is not of their making?
Briefly, let me repeat a point that I made in an earlier intervention. I referred to the slate industry and the fact that there is compensation for slate workers who are unable to trace the insurers of their former employers, and the compensation is paid at 100%. That is in respect of slate workers and workers in other industries, such as the jute industry in Dundee and the china clay industry in Cornwall.
I have heard the arguments and that there have been negotiations and that a figure has been arrived at, and I can see the practical politics of that. I will end by saying that whatever the technical aspects of the case, there is a moral issue here. I support amendment 4, tabled by the right hon. Member for Newcastle upon Tyne East, but if that fails, I will back the other relevant amendment.
I rise to speak to amendment 9 in my name and to support all the other amendments in this group. Amendment 9 seeks to enshrine in the Bill the 3% of gross written premium, which is the levy to be imposed on insurance companies to fund the mesothelioma payment scheme.
What I want from this amendment is a cast-iron guarantee that that levy will remain in place as long as the scheme continues. I am sure that the Minister feels that he has already given me that guarantee on at least one occasion—if not on many occasions. For example, he gave it in Committee on
I am grateful for that further assurance. On
“Three per cent. is 3% and we have no intention of moving away from it.”––[Official Report, Mesothelioma (Lords) Public Bill Committee,
He has given us a further assurance this afternoon. He was a wee bit more equivocal, if he will forgive me for saying so, in his letter to Committee members on
“We will look to ensure that the rate of the levy continues to be 3% of GWP...or equivalent to 100% of average civil damages.”
I am particularly concerned about this, because the Government’s impact assessment says that the levy will raise £371 million over 10 years, but I have subsequently learned from the economist at the Department for Work and Pensions that their modelling to arrive at that figure is based not on 3% “not going anywhere” but on how much it costs to meet payouts at 75% of average civil damages and the associated costs. In fact, the figure of £367 million in the impact assessment, which is what the Government have been relying on as the cost of the scheme that they say is affordable to the industry, means that the industry will face a levy of just 2.46% over 10 years. I know that the Minister has assured us that there will be a review after four years of the operation of the scheme, the amount the levy has raised and what can be done to increase the rate of payments beyond 75%. Indeed, the Minister has said to me that there might be other things that can be done, too.
If the industry can afford 3% today, it can afford 3% over the lifetime of the scheme. If the rate were maintained at 3% over the first 10 years of the scheme, it would raise £452 million rather than £371 million. That would be a further £81 million for sufferers that the industry is telling us it can afford. Indeed, the industry thinks that the scheme will run for 30 or 40 years and talks about there being a cost of £30 million to £35 million a year, or £1.2 billion to £1.4 billion over the whole period of the scheme. The cost of 100% payouts going back to 1968 will be £1.1 billion, so 3% would allow us a much earlier start date and to increase the rate while leaving some money over for research or to cover other diseases.
It seems to me that there is plenty of scope to enshrine the level of 3% in legislation. The industry can afford to pay it and we have no reason to believe that it cannot or will not be able to afford it in the future. The industry says that that is an acceptable levy that would put more money into the scheme, if not immediately then in subsequent years. The industry will face the levy during the first four years of the scheme, so we are not asking for any extra money during those years. I cannot understand why that levy cannot be enshrined in the Bill today.
I strongly support amendment 5 on the start date, proposed by my right hon. Friend Mr Brown, for exactly the reason given, for example, by my hon. Friend the Member for Wansbeck (Ian Lavery)—the guilty knowledge which backdates, even on the most modest reading, to at least February 2010 when the Labour Government launched the most recent consultation. I would argue that since that date the industry has been on notice that there will be a scheme, and one for which it will have to pay.
The Minister says that one option in the consultation was to do nothing, and that might be true. Consultation documents always contain a do nothing option, but that rarely suggests that nothing will transpire. I do not think that the Government of the day, this Government or insurers have thought that doing nothing was the option on the table. Labour’s consultation document specifically said that Ministers were
“persuaded that an Employers’ Liability Insurance Bureau…should form part of the package” creating a compensator of last resort. The industry has been planning for a scheme based on market share of employers’ liability insurance, either historic or current. In its response to the Labour consultation, the industry concentrated on only two costed models and made it quite clear that that was the basis on which it expected the scheme to proceed.
It has been noted, although I think some of my colleagues were rather sceptical about the figure, that backdating to 2010 could increase costs by £80 million over 10 years. I think that figure is acceptable and understand why the Government have suggested it. We will see an early spike in claims during the first few years of the scheme and in later years, of course, we will expect the number of claims to reduce. I accept that backdating the scheme to February 2010 would breach the 3% levy by taking it to 3.56% over the first four years of the scheme, although it would be comfortably within 3% over the first 10 years. Ho0wever, I strongly contend that for a multi-billion-pound industry that is receiving, as colleagues have pointed out, a £17 million gift and a £30 million loan from the Government, it could easily swallow that cash-flow issue, especially given that, as has been pointed out repeatedly this afternoon, it has been taking income in premiums for such policies over years—in fact, over decades. The money is already in its hands.
Let me remind right hon. and hon. Members that it is not possible to access the scheme unless the technical committee that will manage it takes a view that an employers’ liability insurance policy was in place. It is not possible to access the scheme on the basis that there was no policy; there must be prima facie evidence that there was a policy and that premiums were therefore collected.
I understand and strongly sympathise with the points made by colleagues about the moral case for 100% of average civil damages to be the basis on which the scheme should operate. In fact, I believe that that is the Minister’s, and everybody’s, moral preferred position in relation to the victims of this horrific disease. I was very pleased to hear him put on the record—I think it is the first time he has had the chance to do so—that it was not his view that a figure below 100% was necessary to create some sort of incentive to sufferers to find an insurer rather than simply come to the scheme. I think we have all found quite offensive the suggestion that sufferers are in some way shopping around for the best deal. I am grateful to him for putting on the record that the Government do not believe that that would be the case.
I was struck by the point made by my hon. Friend Andy McDonald—sadly, he is not in the Chamber at the moment—that because of well-established principles of contributory negligence, in paying out less than 100% to victims we albeit inadvertently send a message to them that it may be perceived that to some degree the suffering that they are facing is their own fault. That is an extremely unfortunate and unjustified message to send to victims who have contracted a disease simply from going out to work to earn a living and support their families. I hope we can all accept that whatever the constraints imposed by the deal that the Minister has been able to negotiate, the moral case for mesothelioma sufferers coming to this scheme is that they should be compensated in full.
The proposal by Tracey Crouch is supported right across the House. We recognise that an 80% payout is a very reasonable compromise even within the terms of the scheme that the Minister has negotiated. There would be more money in the scheme if the Government and the industry stopped messing around with the likely legal fees that claimants would be facing. The fees were £7,000 and then went down to £2,000, which somehow magically allowed us to get the payouts up to 75%, and now they have gone back up to £7,000 again. Stephen Phillips is not able to join us in today’s debate, but in Committee he made some very telling points about lawyers’ fees. He is a well-paid lawyer, so I am sure he will forgive me for saying that he ought to know —[Interruption.] The fees were considerably more modest than his fees, as I think we all heard. He pointed out that any assumption in the basis on which legal fees were calculated within the scheme would create the danger of that becoming the tariff for its legal fees. The Minister undertook to have further discussions to see whether it would be possible to bear down on the level of legal fees.
I have since been advised by an asbestos victims support group that it has been asked to help to get mesothelioma victims to put pressure on their lawyers to keep the fees low. That is unacceptable. At a time when they are coping with an appalling illness and worrying about the future for their families, as they know they may not even survive to receive the compensation that they are due, the last thing they need is to get into an argument with their lawyers about fees. I really hope that the Minister is able to do much more than simply pass the problem back to victims. Perhaps he will respond to that point in his comments.
Another issue that we discussed in Committee and have not yet got to the bottom of is that a whole range of other fees are covered by the levy, as we have debated during the passage of the Bill: the insurance industry’s legal fees of £24.2 million, as distinct from the victims’ legal fees; the scheme administration costs of £4.4 million; and the set-up costs of £1.4 million. In Committee, the Minister assured me that the industry’s legal fees would be spent to the benefit of claimants and said he would get back to me if he was wrong about that. As he has not done so, I assume that those fees will be spent for the benefit of claimants. However, since he told me that on
I also hope the Minister will be able to confirm that the sum set aside for setting up and administering the scheme will contain no profit element. This is of particular concern, because we know that the insurance industry itself is likely to bid to run the scheme. The Minister assured us in Committee that the process of appointing the body to run the scheme would be a competitive one. He said it would be based on value for money and commercial criteria, which is welcome, but those criteria would not necessarily preclude the administrator from making a profit: they might simply have to come up with the best price.
I am still in some about doubt about the position on arbitration costs and whether they are also being taken out of the levy. The Minister has not yet responded on that.
All those factors could serve to deplete funds that could otherwise be deployed to more generous payouts or to an earlier start date. It really is not good enough that we are still in the dark at this very late stage as to how much of the levy is earmarked for expenditure other than direct payments to victims.
I welcome the debate we have had this afternoon and the attempts made by Members throughout the House to extend the generosity of the scheme to victims. I very much hope that the Minister will be able to give us some positive reassurances as to how that can be achieved, because I know he shares with all colleagues the wish for the scheme to be as generous as possible. It is strongly our view that there is every reason to believe—we have heard the evidence this afternoon—that the scheme can afford to be more generous than it is at present.
I again thank colleagues from all parties for the tone of the debate and the measured way in which it has been conducted. I thank in particular the shadow Minister, Kate Green, for her comments. I hope she will agree that we have been as helpful as possible to her, her team and other colleagues, not only through letters but through access to our team managers. I am slightly concerned about the technical questions she asked at the end of her speech, because I had hoped that they had been addressed. If I am not able to address them all now, I will make sure that my team contacts her to do so in the near future.
We have heard some excellent contributions. As has been said several times, morally I am probably in agreement with nearly everything that has been said. These people are not at fault. They mostly went to work in good faith and they have contracted an atrocious, abhorrent disease that is fatal. They and their loved ones need this fund’s support. There are no arguments whatsoever about that. Many of us are disappointed that we are still discussing this issue all these years after this terrible disease, its cause and its effects—it is fatal—were known about.
At the outset I thank Mr Brown for his very kind comments. I praise the work he did when he was a Minister to try to introduce a similar Bill. I also praise not only the support groups, but the trade unions, because without their pressure over the years we probably would not be in this position.
Having said that my moral position is absolutely as one with that of colleagues, I have to be a pragmatist. The Bill has come from the Lords and I am the Minister with responsibility for taking it through the House.
Sammy Wilson mentioned the figure of £17 million, but that is to get the fund going and to keep us below 3%. It is not being given to the insurance companies to do whatever they want with it. It is to get the fund running for four years. On the issue of 3%, the right hon. Member for Newcastle upon Tyne East was spot on to say that, although he was thinking of a 10-year period, I was thinking of four years, and that after that four-year period there will be a review.
I am restricted by the maths and our agreements. Could the insurers afford this? I have no doubt whatsoever that they could, but that is not the deal that has been struck. As has been said, the House could decide to set the limit at 80%, but I want this Bill to receive Royal Assent and for compensation to be paid in July. That is not happening at the moment and it has not happened for years. Could it be better? Yes, it could. I said as much on Second Reading and I have said so extensively elsewhere.
I agree with much of what the Minister has said. Will he respond to the point made by my hon. Friend Kate Green about the 3% levy? If the advice is correct that the money will not be spent in the first years of the scheme, perhaps it could be redirected into medical research on the causes of mesothelioma.
What I have said in Committee and today is that there will be a review after four years. I have committed to the 3% figure beyond the four years, as is absolutely right. I will come back to the £80 million that has been touched on in a second. Actuaries have looked at this very carefully and the Health and Safety Executive, for which I am also responsible, has looked at the costings. We will consider the review at the end of the four years, but there is no way in which the figure will drop below 3%. As far as I am concerned, that will flow through until we get 100% of compensation.
It is very important for hon. Members to understand that we are talking about 75% of the average, which means that some people will be worse off—I fully admit that—but that some people will get more than they would have done if they had been able to trace their insurer or employer and go through the scheme. That is an interesting parallel. The percentage is an average, and in working with an average some will be on one side of the line and some will be on the other side of the line. I know that it is really difficult for those on the wrong side of the line in theory, but there will be people on the other side of it.
Where should the arbitrary line be? Of course I could say, as I did in Committee, that the consultation issued by the Government before the last election included a proposal to do nothing. I accept that there is a proposal to do nothing in most consultations, but it was there. I do not, however, think that that is the biggest issue; the biggest issue is how we stay within the 3% over the period and within our financial obligations. That is the position that I am in.
I cannot, obviously, support the 100% figure. I pay tribute to my hon. Friend Tracey Crouch for her work on the cross-party group, including before she entered the House, but, sadly, I cannot accept 80%. We have discussed that, and I think that she understands why. I need to make sure that we stay within the realms of what we have agreed and get the Bill through the House and on to the statute book.
Some things are out of my hands, and such is the legal situation in relation to clawback. I cannot change that through the Bill. It just happens: if someone gets compensation, there is clawback on it at 100% because taxpayers’ money is used to pay the compensation.
From what the Minister is saying and the feeling of the House, it may well be that the Bill is just a work in progress. Are we collectively agreed—the Minister, in particular—that we may well have to revisit the Bill properly after, say, three years and try again to give decent compensation to everyone?
That is exactly what we are doing because there is a four-year review. It was announced in the other place, and I talked about it on Second Reading and in Committee. We are committed to the four-year review, which I know we will work on.
All the amendments would affect the speed at which the Bill goes through, because if we amend it today, it has to go back to the other House and there will be ping-pong. That would delay the compensation, which should be remembered by hon. Members who really want their constituents to get compensation. Along with the restraints on me within the agreement, that is why I will oppose the amendments. I hope that hon. Members will not press their amendments, so that we can make progress and get on to the next group.