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New Clause 1 - Establishing additional schemes

Part of Mesothelioma Bill [Lords] – in a Public Bill Committee at 3:00 pm on 12th December 2013.

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Photo of Kate Green Kate Green Shadow Minister (Work and Pensions) 3:00 pm, 12th December 2013

Throughout our deliberations on the Bill, there has been discussion of opportunities that may or may not exist to extend the scheme in a number of ways. New clause 1 simply deals with the possibility of extending it, or additional schemes, to other asbestos-related diseases. New clause 7, which has been tabled by my right hon. Friend the Member for Newcastle upon Tyne East and on which I will speak in a moment, relates specifically to the extension of a scheme to eligible people with pleural plaques.

New clause 1 asks not that an extension to other asbestos-related diseases be encompassed into the scheme provided for in the Bill, but that the Minister lays a report before Parliament within 12 months, explaining exactly what the Government intend to do and will be able to do about extending a payments scheme to a wider range of asbestos-related diseases. We recognise that the long and short titles of the Bill would exclude the possibility of doing that in this Bill, but we are also aware that there have been encouraging indications from Lord Freud and others that the Government have not ruled out the possibility of extending some other form of payments system to other asbestos-related diseases.

We do not believe that there would be a moral reason against doing such a thing. We have heard some powerful contributions, for example from my hon. Friend the Member for Wansbeck and from the hon. and learned Member for Sleaford and North Hykeham, about how people have often incurred mesothelioma while going about their daily work. The same is true of other horrible asbestos-related diseases.

On Second Reading in the House of Lords, Lord Freud said:

“The Bill does not—and cannot—look to respond to all asbestos-related disease.”

However, he went on:

“The issue of individuals who have developed other asbestos-related diseases through negligence or breach of statutory duty and are unable to bring a civil claim for damages of course needs to be addressed.”—[Official Report, House of Lords, 20 May 2013; Vol. 745, c. 690.]

I hope that the Minister will be able to provide stronger assurances about the Government’s intentions in that regard. The Government’s impact analysis states that

“extending the scheme to include other asbestos related diseases would result in approximately 4,500 extra successful applicants to the scheme. This would increase the levy by approximately £470m.”

That would effectively double the levy over 10 years. The Asbestos Victims Support Groups Forum UK strongly believes that the logic and assumptions used to arrive at that calculation are significantly flawed. Its briefing, which I am sure the Minister has seen, suggests that such an extension would add only 20% to the costs of the current scheme. The organisation states:

“This analysis is ill-researched and wholly misleading.

The author of the Analysis acknowledges that the assumptions made in the analysis are not appropriate, but because of supposed lack of evidence she relies on the inappropriate assumptions to provide an estimate of the impact of extending the scheme.

Evidence is available and we have referred to some sources below. There is no excuse for failing to cite evidence which is so easily available.

We believe her analysis should be withdrawn and a properly researched analysis should replace it.”

The organisation highlights flaws in a significant number of assumptions: the failure to distinguish the success rate for mesothelioma claims from that of claims for other occupational diseases; the failure to recognise that other asbestos-diseases, on average, attract considerably lower levels of average compensation; the failure to take into account the view that asbestosis and pleural thickening diagnoses may have already reached their peak, unlike mesothelioma, which is predicted to spike in 2015, and therefore the number of claims over the 10-year impact assessment period are likely to diminish; and finally the assumption about the average payment per claim, which the ad hoc analysis concludes will be the same value as mesothelioma payments, at £87,000. In the words of the Asbestos Victims Support Groups Forum UK, “this is preposterous”. Using its own evidenced assumptions, the organisation has conducted an impact assessment. It found the cost during the lifetime of the 10-year impact assessment to be £77 million, some £400 million less than the cost identified in the Government’s impact assessment. That is on the cusp of being affordable within the existing scheme if we accept, as I suggested earlier, that a 3% levy should raise £471 million.

Even if the administrative costs were doubled to allow for wider-ranging or new schemes—that is not included in the Asbestos Victims Support Groups Forum UK analysis—the costs incurred would be only £131.6 million, which is far below those quoted in the Government’s impact assessment. An additional 2,268 people would benefit, which is almost double the number of beneficiaries of the current scheme.

The Opposition are surprised that the Government have used such speculative figures when other, more reliable, figures are readily available from the UK asbestos working party, a working group of the Institute and Faculty of Actuaries, which is not famed for its speculative approach to statistics. Given that the criticisms made by the Asbestos Victims Support Groups Forum UK of the Government’s analysis were sent to the Department on 4 December, I am puzzled why they have not been incorporated or at least addressed in the latest ad hoc analysis published on 6 December.

I invite the Minister to commit to reviewing the figures in the latest impact assessment and providing a detailed response to the concerns and assumptions of the Asbestos Victims Support Groups Forum UK and the figures produced by the UK asbestos working party. I recognise that that, in and of itself, will not bring other asbestos-related diseases within the ambit of the Bill. Given that the Minister has been willing to give a strong assurance of the Government’s intention in relation to other asbestos-related diseases, a proper cost estimate of such an extension would be helpful to all parliamentarians.