Clause 70 - NHS costs recovery

Health Bill – in a Public Bill Committee at 6:30 pm on 10th January 2006.

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Question proposed, That the clause stand part of the Bill.

Photo of Andrew Lansley Andrew Lansley Shadow Secretary of State for Health

We have shifted to a different subject. The Minister will no doubt have text that explains the clause better than I can. I recall the discussion that we had on the 2003 legislation about the extension of NHS costs recovery, which has not been brought into effect. If I remember correctly, the previous provision, which was for the recovery of costs when road traffic accidents gave rise to NHS treatment and there was an insurance policy in place that enabled a liability to be met by the insurers, was to be extended in the 2003 legislation to personal injury claims. In effect, it was likely to apply mainly to occupational health-related claims and the like.

My memory is that the Government legislated for that cost recovery in 2003 and subsequently consulted on the nature of it. In the course of that consultation, problems emerged about the precise circumstances in which costs could be recovered. The explanatory notes help us by stating

''contributory negligence to be taken into account''.

The previous legislation simply would not have enabled the recovery amount to be varied.

We expressed concern once about the extent of the liability that was likely to emerge for businesses more than once in the course of the discussion on the 2003 legislation. It has not been my responsibility since, but I am aware that since 2003, and particularly during 2004, there were substantial increases in the cost of employers' compulsory liability insurance. In fact, many insurers found that they were doubling or tripling it. I shall not rehearse the ways in which the Government have tried to respond to that, not least because I do not precisely remember them all. They have intervened since the 2003 legislation through such things as the Office of Fair Trading investigation to determine whether there were any difficulties in the marketplace. Also, the Department for Work and Pensions had a review, the purpose of which was to work with the industry to try to offset the rising costs.

All of that is slightly by the way. The point is that the Minister with responsibility for small business, who is one of the relevant Ministers in the Department of Trade and Industry—the Minister knows who I mean—made it clear that the Department would not introduce this additional imposition on businesses until such time as the problems associated with the rise in employers' compulsory liability insurance and the cost that that would impose on businesses had been resolved. I believe that it was the hon. Member for Edinburgh, South (Nigel Griffiths), who is now the Deputy Leader of the House of Commons, who said that. I do not think for a minute that those problems have been resolved.

I know enough about my friends in business representative organisations, whether it be the Federation of Small Businesses or the British Chambers of Commerce—I declare a past and current interest—or others. They would tell us that   employers' compulsory liability insurance continues to rise. The market is much more difficult for businesses than it used to be and, notwithstanding the fact that this part of the Bill will somewhat ameliorate the total extent of the increase in costs that businesses have to bear, we are looking at a substantial further increase in the charges that will have to be met through personal liability insurance. That will have an upward impact on premiums.

I do not have the regulatory impact assessment in front of me, but I am sure it will say that that is not a problem because the Bill reduces the amount that is recovered overall from businesses. However, it is a problem, because we have been holding off—I say ''we'' advisedly. The Government have held off introducing this additional cost recovery scheme because of the problems that business is experiencing. I want to know why they are not continuing to do that. It is clear from what the Minister said that they propose to introduce the measure in 2006. She might be able to confirm the date, but I thought that it was fairly soon. I reiterate our concern that it should not be introduced, with the resulting additional increase in premiums, unless and until the problems in the business sector about access and the cost of employers' compulsory liability insurance have been resolved.

Photo of Caroline Flint Caroline Flint Parliamentary Under-Secretary (Department of Health) 6:45 pm, 10th January 2006

In relation to the hon. Gentleman's detailed points, and the comments that he ascribed to one of my ministerial colleagues, I will seek guidance on the issue and on its relevance and impact—

Photo of Andrew Lansley Andrew Lansley Shadow Secretary of State for Health

To avoid uncertainty, may I say that the Minister of State, Department of Health, the hon. Member for Doncaster, Central may even have said herself that she would not introduce the proposal until these matters had been resolved in consultation with the Department for Trade and Industry.

Photo of Caroline Flint Caroline Flint Parliamentary Under-Secretary (Department of Health)

I will seek to verify the situation in that respect. In relation to the clause, it was proposed because, following the 2003 Act there was still considerable discussion and consultation about whether it provided adequately for contributory negligence to be taken into account in a wider range of cases, which did not just involve court processes.

The proposal will retain option A of section 153 of the 2003 Act, but will expand option B so that any form of non-court based negotiated settlement, which has formal recognition of contributory negligence, can qualify for a similar reduction in independent complaints reviewer charges, not just mediation. For example, arbitration or a settlement negotiated by solicitors or insurers without recourse to the courts, or even just agreed between the parties themselves rather than their representatives, will be acceptable. That is important because I understand that more than 90 per cent. of personal injury claims are resolved without going to court. The proposal will greatly increase the number of cases in which contributory negligence can be taken into account. The hon. Gentleman took the words out of my mouth.

Contributory negligence recognises that the individuals themselves played a part in the injury   that they sustained and thus should be welcomed by business interests since it would, I hope, logically result in compensators having to pay less in NHS charges in many more cases in which contributory negligence is accepted as a factor in the primary compensation claim.

As I said, I will verify the other issues that the hon. Gentleman raised. Rather than re-open the 2003 discussions, which led to the Act, the proposals tackle areas that should have been tackled earlier.

Question put and agreed to.

Clause 70 ordered to stand part of the Bill.