Mesothelioma Bill [Lords]

Public Bill Committee, 10 December 2013.

Philip Davies (Conservative, Shipley)

Before we begin, I have a few preliminary announcements. Members may, if they wish, remove their jackets during Committee sittings. Tea and coffee are not allowed. Please ensure that all electronic devices are switched off or to silent mode.

As a general rule, my fellow Chair and I do not intend to call starred amendments that have not been tabled with adequate notice. The required notice period in Public Bill Committees is three working days. Therefore, amendments should be tabled by the rise of the House on a Monday for consideration on a Thursday and by the rise of the House on a Thursday for consideration on the following Tuesday.

Before we begin our line-by-line consideration of the Bill, some brief explanation may be useful to those who are relatively new to Public Bill Committees. The selection list for today’s sitting is available in the room and shows how the amendments selected have been grouped for debate. Amendments grouped together are generally on the same or a similar issue. The Member with their name on the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on any or all amendments in the group. A Member may speak more than once in a single debate.

At the end of a debate on a group, I will call the Member with the lead amendment again. Before they sit down, they need to indicate whether they wish to withdraw the amendment or press it to a vote. Similarly, if another Member wishes to press a grouped amendment or new clause to a vote, they should let me know. I will assume that the Government wish the Committee to reach a decision on their amendment.

Decisions on amendments do not take place in the order in which they are debated but in the order in which they appear on the amendment paper. I have discretion to decide on separate stand part debates on clauses and schedules, taking account of the extent of debate on amendments.

This morning, the Committee will automatically adjourn at 11.25 am. This afternoon, it is in the hands of the Whips, but around 5 pm is conventional. However, there may be a consensus on making brisk progress with the Bill, given the nature of the matter with which it is concerned.

I hope that this is helpful. Before beginning the line-by-line consideration, we need to dispose of the programme motion and the motion to report written evidence. Ordered,

That—

(1) the Committee shall (in addition to its first meeting at 8.55 am on Tuesday 10 December) meet—

(a) at 2.00 pm on Tuesday 10 December;

(b) at 11.30 am and 2.00 pm on Thursday 12 December;

(c) at 8.55 am and 2.00 pm on Tuesday 17 December;

(2) the proceedings shall be taken in the following order: Clauses 1 to 11; Schedule 1; Clause 12; Schedule 2; Clauses 13 to 21; new Clauses; new Schedules; remaining proceedings on the Bill; and

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 17 December—(Mike Penning.)

Clause 1 - Power to establish the scheme

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I beg to move amendment 13, in clause 1, page 1, line 3, leave out ‘may’ and insert ‘must’.

It is an enormous pleasure, as always, to serve under your chairmanship, Mr Davies, and with the other members of the Committee. I do not intend to press this amendment or the others that I have tabled to a vote, if the Committee is prepared to permit me to withdraw them. They are essentially probing amendments, but they are important ones that I hope the Committee will wish to consider. I hope that the Minister will take them away in due course and come back to the House on Report.

Clause 1 provides that the Secretary of State “may” make regulations to give effect to the diffuse mesothelioma payment scheme. The amendment proposes that the word “may” be replaced with the word “must”. The Committee will no doubt appreciate that “may” is permissive, whereas “must” is mandatory. No doubt—at least, I hope—the Minister will indicate that the Government intend to introduce regulations to give effect to the scheme as soon as possible.

The amendment’s other purpose is to give the Committee the opportunity to reflect on what this long-desired Bill actually does. Mesothelioma is a terrible disease, as the House heard from many Members on Second Reading. Three things make the Bill welcome; they indicate what an appalling disease it is. First, we sit here today—in my case, only just—because we managed to get to work this morning. Those who suffer from mesothelioma have the disease simply because they went to work. It is a death sentence purely because they sought to put food on the tables of their homes and shoes on the feet of their children and to go on holiday once a year. For those reasons, the House is right to back this scheme for those who cannot achieve compensation by any other means. It is also right that we consider how appalling the disease is and that people have it simply because they did their jobs.

Secondly, a diagnosis of mesothelioma is about the worst diagnosis someone can have. There is no cure. Once someone has it, that is it. As I have said, it is a death sentence simply because someone went to work and was subjected to the causative factors by virtue of doing the job and the negligence of the employers. No one should forget how appalling the diagnosis is when it is given to someone. It is not as though they have only a short time to live. They have months; sometimes a little more than a year, or, very occasionally, more than that. They have to live throughout that period with the knowledge that purely because they went to work, they have this appalling disease and that they will be leaving behind their families and loved ones.

Thirdly, mesothelioma does not lead to a pleasant death. It gives me no pleasure—I know that many with the disease will read the Hansard report of this Committee—to say that it is not a pleasant death. It is a death that leaves behind many loved ones, because someone did no more than their job. In such circumstances, the Bill—in clause 1, the Secretary of State may make regulations to give effect to a scheme for which we have waited so long—is deficient, unless, as I hope he will, the Minister indicates that he will introduce regulations as soon as he possibly can after the Bill has completed its passage through the House and proceeded to Royal Assent, to ensure that those who have suffered for so long without proper compensation, because their employers or insurers cannot be traced, will receive the compensation to which they are entitled.

Kate Green (Labour, Stretford and Urmston)

It is a great pleasure to serve under your chairmanship, Mr Davies, and to follow the opening remarks of the hon. and learned Member for Sleaford and North Hykeham, which I fully endorse. Like him, I believe that it is absolutely imperative that the Bill completes its passage and that the necessary regulations are introduced as quickly as possible, so that we can have payments flowing to the victims of this terrible disease and to their families. I do not doubt the Minister’s intentions to do just that.

We saw from the way in which the Bill was taken forward by the noble Lord Freud in the House of Lords the degree of commitment that exists throughout Parliament to get the legislation in place and the scheme active as quickly as possible. However, that does not mean we should accept that the Bill in its present form is the very best that we can do for victims. I hope that we will have the opportunity to agree to areas where we can perhaps do a little better in Committee and on Report.

The scheme has been long awaited, as the hon. and learned Gentleman said, but in the light of the appalling suffering and death that has been described, it is not yet adequately generous. We do not believe that the scheme is unaffordable for the multi-billion-pound insurance industry, which very late in the day is making quite a modest gesture to victims and their families.

We believe that it is important to take time to look in detail at the Bill’s provisions, and I am pleased that we have this week and next to do that. We would do a great wrong to victims if we did not scrutinise the Bill in detail, to look for where improvements can be made. There is no doubt that victims deserve the best protections that Parliament can offer. That is our role as parliamentarians, not simply to take a done deal as presented by the industry.

We are to here to legislate for the right and just deal for victims and their families. We will take this opportunity to ensure that we do the best that we can for those people. I know that the Minister will also want to ensure that the Bill is as good as it can be, so that the scheme that we all hope to see in a few months can also be as good as it can be for victims.

Mike Penning (Conservative, Hemel Hempstead)

It is a pleasure to serve under your chairmanship, Mr Davies. I welcome the tone of the Opposition and their support for the Bill. I fully accept and understand that there should be as much scrutiny as possible. I also welcome the opening remarks of my hon. and learned Friend the Member for Sleaford and North Hykeham regarding amendment 13.

There is no doubt that the sufferers of this horrible disease need help. We would all have hoped that they would have been compensated through their employers’ insurance schemes. The scheme in the Bill is for those let down by the system who have no other recourse. The proposal did not come from the insurers, as was discussed extensively in the other place; it came from hard-fought negotiation. Although I accept that it is not perfect and that there will be understandable requests for an increase in the negotiated compensation, we are where we are. There was extensive discussion in the other place. I will look carefully at how we could improve the Bill without delaying it. That is important because the peak of claims will come in 2015. I will come on to how we can use the regulations to strengthen the Bill as much as possible.

The Bill provides that the Secretary of State may, by regulation, set up a mesothelioma scheme. The amendment would provide that the Secretary of State must set up a scheme. We believe that the change from “may” to “must” is not needed, as the intention is to lay regulations as soon as possible. There are already draft regulations, and we will ensure that we consult as widely as possible, particularly with the relevant groups, which have understandably been lobbying us so hard.

My learned and hon. Friend’s amendment may be intended to ensure that we do not repeal the legislation. However, at some stage in future, I hope that the Secretary of State will be able to repeal it because the scheme is not indefinite. We expect and hope that deaths from this terrible disease will reduce and that there will be an improvement in tracing. Therefore, the scheme could be brought to an end and will no longer be needed. Of course, we do not have a definite date for that. However, if we accepted the amendment, we would be put in an indefinite position and would have to introduce legislation for a repeal to take place. I can assure my hon. and learned Friend that we will introduce the regulations, which are currently in draft form, and that we will get them through as soon as possible.

Nick Brown (Labour, Newcastle upon Tyne East)

I accept what the Minister says about the difference between “may” and “must”. To be honest, it is not the first time that I have heard the matter debated. He mentioned the regulations that he intends to introduce. We all know that the thrust of the measure under consideration today will be contained in the regulations. He mentioned strengthening the regulatory regime. Is he able to tell us now what sort of strengthening of the regulatory regime he envisages?

Mike Penning (Conservative, Hemel Hempstead)

The right hon. Gentleman is experienced in the nuances of “must” and “may”, as he has been in government, and I thank him for his comments. This sounds like semantics, but it is actually a serious and important point. The key is that, when I can use the regulations, I will do so to strengthen the Bill. At this moment, as we go through the Bill line by line, I cannot indicate where that will be. My difficulty—I touched on this on Second Reading—is that when I use the regulations that must not cause ping-pong. A situation in which we go back and forth to the House of Lords will delay Royal Assent and so delay the compensation, which we hope to get to victims by July. I will work as closely as I can within the regulations as far as I am allowed. As an experienced former Minister, the right hon. Gentleman will understand exactly where I am coming from. I will use the regulations wherever I can, but at this stage, as we move through the amendments, I will see how I can do that.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

On the basis of the Minister’s assurances, for which I am most grateful, and notwithstanding the fact that I disagree with both him and the right hon. Member for Newcastle upon Tyne East—the Act can be repealed by a future Parliament, come what may, so it matters not whether it says “must” or “may”—I beg to ask leave to withdraw the amendment.

Paul Goggins (Labour, Wythenshawe and Sale East)

I beg to move amendment 55, in clause 1, page 1, line 6, at end insert—

‘; and for funding research into mesothelioma (through the research supplement under section [Research supplement]).’.

Philip Davies (Conservative, Shipley)

With this it will be convenient to discuss the following:

Amendment 56, in clause 13, page 7, line 10, at end insert—

‘( ) The regulations mentioned in subsection (1) must provide for the levy to include a research supplement in accordance with section [Research supplement] (in addition to the amounts set for the purpose specified in subsection (1)).’.

Amendment 57, in clause 13, page 7, line 11, after ‘levy’, insert—

‘(not including the research supplement)’.

Amendment 58, in clause 13, page 7, line 16, after ‘levy’, insert—

‘(not including the research supplement)’.

Amendment 59, in clause 13, page 7, line 18, after ‘levy’, insert—

‘(not including the research supplement)’.

New clause 5—Research supplement—

‘(1) This section makes provision about the research supplement mentioned in section 13.

(2) The research supplement—

(a) must be expressed by regulations under section 13 as a percentage of the amount set for the purpose specified in section 13(1) in accordance with section 13(2) to (5); and

(b) may not exceed 1 per cent of that amount.

(3) Regulations under section 13 must include provision about the application of the research supplement; in particular, the regulations—

(a) must include provision for amounts raised by way of the research supplement to be applied by way of grants or other financial assistance for research into mesothelioma;

(b) must require the scheme administrator to make arrangements for the application of the research supplement;

(c) may allow the scheme administrator to arrange for a body which handles applications for research funding to administer the research supplement on the scheme administrator’s behalf;

(d) may allow receipts by way of research supplement in respect of one period to be held for allocation in a later period, and for investment of receipts pending allocation.

(4) Before making regulations in respect of the research supplement the Secretary of State must consult—

(a) insurers;

(b) medical charities and research foundations; and

(c) other persons or bodies who the Secretary of State thinks are likely to be interested.’.

Paul Goggins (Labour, Wythenshawe and Sale East)

As other Members have already said, it is good to see you in the Chair, Mr Davies. In your introductory remarks, you reminded the Committee of the procedures that you intend to follow and pointed out that that was mainly done for newer Members who are less used to Committee work. I assure you that we all appreciate a reminder about the rules of how the Committee operates.

I agree with the point made by my hon. Friend the Member for Stretford and Urmston—I am glad the Minister took it in the constructive way that it was intended—that those of us who move amendments in Committee seek not to delay the Bill but to improve it. If we work constructively that can happen. Since Second Reading, I have been trying to think of an amendment that we might agree in Committee to improve the Bill that would cause such great consternation to their lordships that we would be involved in a ping-pong battle, but so far I have not been able to. Perhaps the Minister will point to one during our discussions; but given the debates that have taken place in the other place, if we improve the Bill, I can only see that being greeted warmly by their lordships. Let us work constructively in that way; I am sure that we can make progress.

I commend the hon. and learned Member for Sleaford and North Hykeham. He and I have worked together previously on legislation, and I know that he will be a great asset to our deliberations in Committee. He was right to take the opportunity, right at the start of our consideration of the Bill, to remind us what mesothelioma means to the people who suffer from it and the people who care for them. The way that he did so was highly commendable. I regret that my amendments might take up a little more time than his comments, but I am sure that the Committee will bear with me.

The group of amendments, taken together, would impose, in addition to the main levy, a levy not exceeding 1% to fund research into the causes and treatment of mesothelioma. We all feel a sense of duty to those who have to endure such dreadful suffering and a painful death, and we owe it to them and their families to do what we can to improve our understanding of the causes of mesothelioma and to improve treatment for those who suffer from the condition.

The amendments are supported by the British Lung Foundation and by a large group of peers, ably led by Lord Alton of Liverpool, who failed by just seven votes to add similar provisions to the Bill. I pay tribute to Lord Alton’s determination in pursuing this issue, not only when the Bill was under consideration in the Lords but in a question to the Minister, Earl Howe, only last Thursday. He took the opportunity to remind their lordships—and all of us—that 2,400 people will die from mesothelioma this year, and over the next 25 years, some 60,000 might die from the disease. He argued effectively and persuasively last Thursday, as he has done before, that it would be shameful if we left unfunded the research that could save lives and ease the pain and dreadful suffering that people with mesothelioma have to endure.

To their credit, four of our leading insurance companies decided in 2010 to stump up the cash to fund new research into mesothelioma. Those four companies are Aviva, AXA, RSA, and Zurich. They decided that they would provide a grant of £2.55 million to the British Lung Foundation to invest in research projects, which are already beginning to make a difference. Members of the Committee might have seen some of the detail of the research that the British Lung Foundation has been able to fund as a result of the grant from those four insurance companies.

The Committee ought to consider five particular research projects. That is important, because the research is making a practical difference right now in our understanding of this dreadful disease. The first project is run from Papworth hospital in Cambridge, where a UK-wide mesothelioma tissue and blood sample bank—the meso-bank—has been established. I draw the Committee’s attention to the remarks of Lord Kakkar:

“The meso-bank...is a very important national initiative that will have global significance”—

not just for the UK, but globally—

“because collecting tissue from patients afflicted with mesothelioma provides the opportunity for fundamental and translational research”.—[Official Report, House of Lords, 5 June 2013; Vol. 745, c. GC245.]

The bank allows tissues, blood samples and anonymous clinical information to be collected and centrally stored. The technique is used across a range of research fields to provide the raw material for researchers to carry out their work.

Kate Green (Labour, Stretford and Urmston)

I congratulate my right hon. Friend on his speech and his amendments. He is right to make the point about the global benefits from the meso-bank and the access that it enables us to have to the research. Does he also acknowledge that in the projections around the incidence of mesothelioma worldwide, particularly in developing economies, the spike might be years if not decades away?

Paul Goggins (Labour, Wythenshawe and Sale East)

I am grateful to my hon. Friend for making that point, because that shadow hovers over the whole of the debate. We have the dreadful problem of mesothelioma in this country, and people will die from that dreadful disease, but we know that, because of the export and use of asbestos in the developing world—the so-called BRIC countries—the issues that we face now are issues that other countries will face in future. If we can advance the science and understanding of mesothelioma now, that might do great good not only in this country, but throughout the world. My hon. Friend was right to make that point.

On the tissue and blood bank, researchers can use samples from the bank when they need them, allowing them to do their experiments more quickly and economically. That is an important point. Speed is of the essence. The Minister frequently reminds us that it is important to act quickly. Likewise, it is important that researchers have speedy access to the raw material to help them in their studies.

The first project is very important. A second project is run by Dr Peter Campbell from the Wellcome Trust Sanger Institute in Cambridge. It is a project about understanding the genetic causes of mesothelioma, and we should not underestimate its importance. The research uses technology to identify exactly which genetic mutations are present in samples of mesothelioma taken from 50 patients. Knowing which genes are important and what they do will help scientists to design more effective ways in which to treat mesothelioma—a new approach to treatment in which choices are made according to the genetic make-up of an individual’s cancer. This is important. As medical science develops, solutions or treatments will be built up and designed with the individual in mind, so that we have specific treatment for particular individuals, according to their genetic make-up. Again, this project advances that cause enormously.

The third project is run from the London School of Hygiene and Tropical Medicine and focuses on current asbestos exposures and resulting mesothelioma risks in the UK population. This is an important piece of work that looks long term at the mesothelioma risks and exposure among the UK population as a whole. The study will look at large numbers of people and collect information about asbestos exposure in the workplace and the wider environment since the 1980s. The information will be used to estimate future risks of mesothelioma, which will allow the team to make reliable estimates of how the number of UK cases is likely to change after the predicted peak in 2015 and of which occupations represent the highest risk. We know about the 2015 peak, but the important thing is that beyond that, although we make estimates, we need to understand better the basis on which we are making such estimates. This research project will help us to do so.

Kate Green (Labour, Stretford and Urmston)

I am sure that my right hon. Friend would also want to acknowledge the particular concern not only for people in the workplace, but for children in schools since the 1970s and 1980s. Many of our colleagues are actively engaged on that subject through the all-party group.

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend makes an important point. We think of those affected by mesothelioma as working in heavy industry—electricians, joiners and so on—but others are exposed as well. The number of teachers who have been exposed to asbestos and have developed mesothelioma is running at a worrying level, and my hon. Friend mentioned children attending schools. Obviously, beyond 2015, we need to understand more about the profile of exposure to asbestos and what that is likely to produce in terms of people diagnosed with mesothelioma.

The fourth and fifth projects look at different developments in the treatment of the disease. The fourth project, which is run from the Queen Alexandra hospital in Portsmouth, looks at regular early specialist palliative treatment for mesothelioma. The project is examining whether specialist palliative care immediately after diagnosis, in addition to normal care, assists in relieving the symptoms from which people suffer. The project is looking to produce an increased quality of life, which is to be commended. The researchers are testing things to see whether they can find a way forward whereby specialist care early on in the treatment of someone diagnosed with mesothelioma can add to quality of life.

The fifth project, which is run from the university of Sheffield, asks whether it is feasible to use a combined package of different treatments to relieve pain in mesothelioma patients from an early stage of the disease. It will test the feasibility of offering mesothelioma patients a combination package of up to five pain treatments from when they first develop mild to moderate pain.

All five projects indicate that we are not prepared simply to accept that, when someone is diagnosed with mesothelioma, that is it, there is nothing we can do—all that remains is a painful illness and a dreadful amount of suffering before inevitable death. The projects are stating that there are things that we can do to understand the causes and to improve treatment. Once again, I commend the four insurance companies for taking the initiative to provide the money that means the five projects are now under way.

The funding for mesothelioma research, however, still lags behind other areas of research—for example, two forms of cancer with similar mortality rates to mesothelioma, myeloma and melanoma. The National Cancer Research Institute reported that in 2011, its partners spent £400,000 on mesothelioma research, but the amount spent on research into myeloma was £5 million and into melanoma, £5.5 million. So, £400,000 for mesothelioma and more than 10 times that amount on these other two cancers, which have a very similar mortality rate, and this in a country with the highest death rate from mesothelioma in the world.

Lord Freud was absolutely right when he said in Committee in the other place:

“Something very odd is happening here when so little money has gone into research in this area … There needs to be a kick-start process to get research going here”.—[Official Report, House of Lords, 5 June 2013; Vol. 745, c. GC250.]

Lord Freud was absolutely right. My amendments seek to give that kick start a permanent basis on which it can be developed.

There are at least two problems with the voluntary scheme. I commend the insurance companies for establishing it, but it is a voluntary scheme. The first problem is that it is temporary. Last Thursday in the House of Lords, Earl Howe reassured peers that the British Lung Foundation was in discussion with the industry about extending the arrangement that has run since 2010. It is welcome to learn that discussions are taking place, but that is all they are at the moment: discussions. The reality is that if nothing happens, the scheme will come to an end in the next few months and the important pieces of research that I was describing will simply come to an end. They cannot be funded in the longer term.

In addition to the fact that this is only temporary, the second problem is that currently only four companies make a contribution to the fund. Admittedly, they are four of the largest companies, but there are only four. Something in the region of 150 companies have an interest in the market for employers’ liability insurance, so there should be many more companies involved in this project than just the four. My proposal would mean that all those 150 firms would play a part and make a contribution, helping to fund the research supplement for which new clause 5 sets out the arrangements. The amount shared between 150 companies would be very small and proportionate to their share of that particular part of the insurance market.

I shall go through the amendments in a little more detail. Amendment 55 makes the funding of research part of the scheme that the Minister seeks to introduce. I applaud and support what he is doing in bringing forward the scheme, but I want to make funding research part of that scheme. Amendment 56 requires that the regulations relating to the levy provide for a separate research supplement. Clearly, this legislation that we are debating provides the mechanism for the levy, and I want to make sure that the research supplement that I propose is provided for as part of that levy.

Amendments 57, 58 and 59 provide that the calculation of the main levy—the fund from which claimants will receive their payments, as set out in clause 13—is done without reference to the research supplement. In other words, the supplement is in addition to the levy which the Minister seeks to make arrangements for. New clause 5 sets out the detailed arrangements for the research supplement. It must be calculated as a percentage of the main levy and it may not exceed 1% of it. This is a very modest amount. If the levy is based on market share, so too, of course, would be the research supplement, so a company would pay for the level of engagement that it, as an insurance company, has in that particular market.

Subsection (3)(a) of new clause 5 provides that the research supplement is to pay for research into mesothelioma. Obviously we have to specify in legislation precisely what we want the funding to be for and this is set out in subsection (3)(a). Subsections (3)(b) and (3)(c) require the scheme administrator to arrange the administration of research grants. The administrator could do that themselves, or they could appoint an independent outside body to do it on their behalf. That is an open question for the scheme administrator to decide.

Subsection (3)(d) allows the money to be spread and spent over time. The money does not have to be spent in the year in which it is levied; it may be planned and used sensibly in the long term so that we have well-thought-through research projects that can make a real difference.

Subsection (4) provides for a statutory duty to consult insurers, medical charities and research foundations before making regulations on the research supplement. That is obviously sensible to ensure that the regulations are properly drafted and effective in ensuring that we make the best use of money raised by the levy.

I am aware from other debates, particularly in the House of Lords, that the Government, so far at least, have been reluctant to accept the proposal that I am making now and that Lord Alton and others made in the other place. I find some of the Government’s arguments to be rather weak, and I hope that the Minister will either accept that those arguments are weak or make stronger arguments worthy of further consideration.

The first argument is that the research supplement would be a hypothecated tax, but that should not necessarily be an obstacle to pursuing research that may save lives and improve the treatment of people who suffer from this dreadful disease. If the research supplement would be a hypothecated tax, is not the main levy also a hypothecated tax? What is the difference? If we are proceeding with the main levy, as we should, there is no argument for not proceeding with the additional levy to fund the research.

The second argument is that there is no precedent for such a measure, but there are many precedents. I will mention one or two precedents that will be of particular interest to you, Mr Davies. Section 123 of the Gambling Act 2005 allows for a levy on the gambling industry to fund projects related to gambling addiction or other forms of harm associated with gambling. The Gambling Act provides for a levy, and everyone seems to think that that is a good idea, so why not a levy to fund research into an issue that is at least as important?

Sections 24 and 17 of the Betting, Gaming and Lotteries Act 1963 provide for a levy to be imposed for the benefit of horseracing, including the improvement of breeds of horses. If Parliament was prepared to introduce a levy to pay for the improvement of breeds of horses—again, the Chair would be pleased to see that—surely it should be prepared to fund research into mesothelioma through a levy.

There are other precedents, such as the fossil fuel levy under section 33 of the Electricity Act 1989. There is a levy on the pig industry under section 1 of the Pig Industry Levy Act 1983.

Mike Penning (Conservative, Hemel Hempstead)

And the link to the Chairman is?

Paul Goggins (Labour, Wythenshawe and Sale East)

The link is not necessarily immediately obvious to the whole Committee, but I am sure the Chairman will already be thinking of a connection that could be made.

A levy on the British Gas Corporation was imposed by the since repealed Gas Levy Act 1981, and a levy on licensees, similar to that imposed by section 123 of the Gambling Act, was imposed under section 10C of the National Lottery etc. Act 1993 to provide for problems and issues related to addiction and other negative influences. There are many precedents.

I find the arguments about hypothecated taxes and lack of precedent to be deeply unimpressive and very weak. Perhaps the Minister will come up with a stronger argument this morning, or perhaps he will finally accept that there is merit in my argument and that the Government should accept the proposed modest additional levy to fund such important research. I say that not in the spirit of conflict but in the spirit of consensus.

In the House of Lords on 17 July, Earl Howe set out a number of actions that the Government are taking to promote more research into mesothelioma, and I will briefly go through the points that he made in that debate. I hope that the Minister will be able to update us on the promises that Earl Howe made. First, he promised that

“the National Institute for Health Research will ask the James Lind Alliance to establish one of its priority-setting partnerships. This will bring together patients, carers and clinicians to identify and prioritise unanswered questions about treatment for mesothelioma and related diseases. It will help target future research”.

That was an attempt to try to target research and to elicit new interest in this area of research. I would be interested if the Minister could give us an update on what has happened since July. Earl Howe continued:

“Secondly, the National Institute for Health Research will issue what is called a highlight notice to the research community, indicating its interest in encouraging applications for research funding into mesothelioma and related diseases.”

On that, I ask the Minister to update the Committee, because we need to be persuaded that the Government’s preferred option is producing more effective outcomes than the levy would. Finally, Earl Howe said:

“Thirdly, the highlight notice would be accompanied by an offer to potential applicants to make use of the NIHR’s research design service, which helps prospective applicants to develop competitive research proposals…Finally, the NIHR is currently in discussion…about convening a meeting to bring together researchers to develop new research proposals in this area. The aim is for the event to act as a catalyst for new ideas that will further boost research into mesothelioma.”—[Official Report, House of Lords, 17 July 2013; Vol. 747, c. 786.]

With the greatest respect to Earl Howe, that looks a bit like a wish list from a Minister who was trying to defend the indefensible by not accepting the amendments that had been tabled. In a spirit of consensus, however, and in an attempt to be constructive, I believe that the Committee would like to hear what has happened with those proposals. It is several months since they were made and we need to know what has happened to them as we weigh in the balance whether my proposed levy would be a better or worse way to proceed than the Government’s proposals.

I do not know the real reason why the Government have set their face against the levy. I hope that we will be told of a change to their approach this morning, but that has not happened so far. I wonder whether the Department for Work and Pensions is reluctant to raise funds for research for something that it believes the Department of Health should take care of. I do not think that that is a worthy concern; we should rise above such concerns and cut across boundaries in pursuit of research that will assist sufferers of the dreadful disease of mesothelioma.

Lord Pannick was clear in his contribution to the debate in the other place:

“It would be quite fanciful to suggest that there is a legal reason not to support an amendment”—[Official Report, House of Lords, 5 June 2013; Vol. 745, c. GC247.]

very similar to that which I have tabled. No less an authority than Lord Pannick has said that there is no legal reason not to do it, there are plenty of precedents and the concern about hypothecated taxes is as true of the main levy as it is of the research levy. I find it difficult, therefore, to understand why the Government will not accept the proposal.

Ministers have also argued—this argument is shot through with holes—that there is no lack of funding for research into mesothelioma; instead, there is a lack of high-quality applications. Earl Howe made that point during the brief exchanges last Thursday in the other place, which set off a fierce reaction from members of the medical research community who work on the matter day and night using the modest resources at their disposal. They believe that they have high-quality research, but that there is a lack of money.

The problem is the lack of certainty about money. The current temporary three-year funding is, as we have heard, producing some good research outcomes. If there is uncertainty, how can high-quality researchers be expected to put at risk their own time and resources to gain an end product that simply is not there? They need certainty. I am clear that, if the funding were there at a reasonable level and were sustainable and accessible, the high-quality bids would come.

I will quote an important authority, Stephen Holgate, consultant respiratory physician at the Medical Research Council, clinical professor of immunopharmacology in Southampton, and chair of the British Lung Foundation Scientific Committee. If he does not know about this issue, I do not know who does. He says,

“It is simply not true to state the quality of mesothelioma research applications is not up to standard. Even if it were, the solution would not be to simply withdraw the availability of research funding. In recent years, thanks to contributions from bodies such as the Medical Research Council and charities such as the British Lung Foundation, Mick Knighton Mesothelioma Research Fund and June Hancock Mesothelioma Research Fund, investment in mesothelioma research has increased considerably, albeit from a very meagre starting point. And the quality of research proposal this has attracted has been of an exceptionally high standard.”

He underlined the word “exceptionally”.

There is no doubt that the quality of research project is there. If the funding were more certain and plentiful, there would be the high-quality applications that we would all want to see.

If the Minister were to say today that he was interested in the levy that I am proposing and was prepared to consider it as a reserve power in order to focus the minds of the industry to ensure that it came up with a voluntary scheme that did the business, and that everybody contributed to what would be a permanent scheme—in other words, to hold back the powers that we would pass in the legislation as a reserve—I would consider that. We are trying to work constructively to get something that would work in practice. By and large, all of us would sooner see voluntary schemes that worked well than statutory schemes that were forced on people.

The problem, as the industry itself says, is not that some companies are not prepared to fund this; it is that not all of them are prepared to do so. In order to make the scheme fair and sustainable we must have a formula and a system that means that everybody contributes according to their market share, and that it becomes a permanent feature.

If the Minister is prepared to consider using the proposal as a reserve power in the Bill, as something that could be introduced in future if the voluntary scheme does not work, I would be prepared to consider that in a constructive spirit. That is not my starting point, or my intention in bringing forward the amendments. I think the time has come to make the research permanent and more effective.

I conclude that a small additional levy shared proportionately between all insurers involved in the scheme would be viable, legal, fair and effective. It would enable us to understand more fully the causes of mesothelioma. Crucially, it would help to ease the suffering of those with the condition. I urge the Minister to consider the proposals carefully.

Kate Green (Labour, Stretford and Urmston)

I will speak briefly to support the amendment and commend my right hon. Friend the Member for Wythenshawe and Sale East. There is universal agreement on the urgent need for greater investment in research into mesothelioma. It is also widely acknowledged that the condition has been the poor relation in terms of cancer research spending. It is right that we should want to invest effectively and adequately to address the terrible experience of people dying of this illness. My right hon. Friend highlighted some of the projects that will look at opportunities for better palliative care and pain relief. We should understand what steps are possible to extend life and quality of life, and that is particularly important when we look at the trajectory of the disease worldwide over the coming decades.

It is often thought that mesothelioma is a disease that will die out, because it relates to earlier generations working when the effects of asbestos were not understood. In fact, the effects of asbestos have been well understood for many decades, but, none the less, we have been much more restrictive in this country over the past couple of decades in how we control working with asbestos. There has been a welcome and important focus on the safety of that work.

Worldwide, we know that many developing economies do not have sophisticated health and safety protections. It is absolutely right that, as a leading economy and as the economy that—my right hon. Friend pointed this out—has the highest incidence of deaths from mesothelioma, we should want to develop learning and knowledge for our community, as well as spreading that knowledge worldwide. That is also important when we think of the global reach of UK industry. It is entirely conceivable that UK industry will continue to have interests in some of these developing economies and the businesses in those economies, where the use and management of asbestos might not reach the standards we expect in the UK.

With my right hon. Friend, I welcomed the commitment that was given in the House of Lords for a joint strategy with the Department of Health to boost research and encourage more opportunity proposals for high-quality research, but I, too, am sceptical. It is not a lack of quality research that we are struggling with, but a lack of resource for that research to be carried out. I join him in hoping that the Minister will tell us what progress has been made since Earl Howe’s commitments in July to work with the research community and funders. We want to see real progress being made.

I welcome how my right hon. Friend’s amendments have been constructed to ensure that the levy he proposes is additional to the levy proposed in the Bill, which would be for direct payments to sufferers. The amendments would not take funds from the levied fund for payments; it would be a modest extra payment from the insurance industry specifically to further research.

I would have thought that the industry—leaving aside any moral obligation that it might feel it has to fund such research—has a financial interest in the long run in funding such research. It could be expected that good quality, effective research would mean that the extent of the disease and the damages that people can therefore claim for contracting and living with the disease would reduce over time. The Government would also gain from the proposal, because there could be a reduced requirement for statutory payments as a result of the investment in good quality research.

With my right hon. Friend, I welcome and commend those insurance companies that offer funding for research. I also welcome the reported willingness of the Association of British Insurers to continue to stand ready to offer support. It is important that we nail down what that support will look like in the Bill, because the industry’s best intentions might be subject to market and financial pressures as we move forward. It is important that we secure a specific commitment from the industry that research will not be the bit of expenditure that falls off the end if insurers feel under financial pressure or find themselves in difficult insurance markets.

I hope that today’s debate will achieve two things. First, I hope that it will act as a catalyst for the industry and research community to work together to develop and take forward as quickly as possible a comprehensive programme of well-funded research. Secondly, I hope that the Minister will assure us that he is willing to use these proposals, as my right hon. Friend suggested, as a backstop to encourage the industry to do what it can voluntarily. I know that it will pay careful attention to this debate. We have every reason to believe that there will be good support from the industry, but it should know that it is not just a wish, but an absolute requirement of Parliament that the industry provides funding to facilitate good-quality research into this terrible disease. I look forward to the Minister’s response to my right hon. Friend.

Nick Brown (Labour, Newcastle upon Tyne East)

I would like to add my voice in support of the proposals made by my right hon. Friend the Member for Wythenshawe and Sale East and endorsed by the hon. Member for Stretford and Urmston on the Labour Front Bench. I have not heard a single voice in this or the other place against the principle of what the Government are trying to do. The Bill is designed to help the victims of the most terrible industrial disease. When discussing what we can best do to help our fellow citizens, the current victims and the victims who we know will come after them, it is right to consider what palliative care and ameliorative measures we can support.

It is a pleasure, Mr Davies, to serve under your chairmanship when considering such an important issue. I had the honour and privilege to work for the General and Municipal Workers Union before being elected to this place in 1983, and I had some dealings with early mesothelioma cases that various unions were taking forward to try to achieve through the courts what could not be achieved in any other way. I was told by earlier officials that all sorts of suggestions were made. One well-known employer in the industry asked whether, given the long lead time between the cause of the disease and its evolution, it would be all right to employ only people aged 55 or over, to which the answer was no.

Thinking has moved on a bit since then, but it is interesting that my right hon. Friend referred to research showing a genetic propensity to asbestos-induced mesothelioma. That research is important and its implications will be clear to every member of the Committee. It is in its infancy, but it is important to emphasise that there is no immunity, and that no citizen of this or any country is exempt or protected from the effects of asbestos-induced cancer. We know that there is no other way of inducing it. It relates specifically to asbestos, and almost always but not entirely in this country to exposure in an industrial context.

The phrase, “more research is needed” is often used in this place, and in this case it is true. My right hon. Friend made a powerful and moving case. We must think of the victims and their profile. It is true that contemporary discussion of this condition relates to heavy industry—for example, people who worked in the railway industry and sprayed the asbestos on the inside of the carriages with a minimum of protection, people who worked in shipbuilding, people who worked in heavy engineering, people who worked underneath laggers and as laggers and were sprinkled with the dust. It is not a coincidence that the Labour members of the Committee represent industrial constituencies—constituencies with a heritage of working in heavy industry—and therefore constituencies that have clusters of victims of asbestos-induced disease.

The potential from the research projects that are under way is substantial. In my own city of Newcastle upon Tyne, we are very proud of the work that Newcastle university and others have done on the development of Alimta. That drug is an expensive intervention, but for some patients it has proved effective, not as a cure but as an alleviation of the deterioration and a slowing down. Admittedly, that is not yet for very long, but the drug does work for some people. In its invention—its discovery—it is surely offering a potential way forward for the future. My hope is that we can provide funds to build on such research and other ideas of the same nature. My right hon. Friend the Member for Wythenshawe and Sale East referred to the work that is being done at Sheffield university, where a combined package of measures is having an ameliorative effect on victims and may offer a different way forward.

All of this—much of the work is in its infancy—has to be paid for. I want to pay tribute to the funding charity that I know of, based in Wallsend, the Mick Knighton Mesothelioma Research Fund, which has raised more than £1 million. It is named, as I imagine the Committee will realise, after a victim of mesothelioma. To raise that much money, admittedly in a former shipbuilding community, in which these issues are understood and deeply sympathised with, is a substantial achievement. This is not money raised from wealthy people; it is money raised from citizens of ordinary or less than ordinary means, who give willingly because they know that the cause is right and just and they are incredibly sympathetic to the victims, who are their friends and fellow workers—people they will have known all their lives. If a community that cannot possibly be described as a wealthy community can make such generous contributions to a cause of this kind, surely it so much more behoves us to think about doing the same, in what my right hon. Friend has described as a relatively modest way.

My right hon. Friend referred to the temporary nature of the scheme. I would hope that any funding mechanism that we could come up with would not be temporary, but would be industry specific and underpin the research efforts that are being made. My right hon. Friend was absolutely correct to emphasise that this money would be in addition to, rather than taken from, any moneys that are available for identified victims who will benefit under this scheme. I strongly support him in that. In his discussion of hypothecated tax, he went through a long list of levies. Actually, he missed out the meat and livestock industry levy—he did manage to find the pigs, but not the other animals. The levy is there because the industry wanted a levy body and believed that others would not contribute unless the levy was made statutory.

It is well known in this place that the Treasury is not enthusiastic about hypothecated taxation. It will have made its views very clear to the present Minister as, I can tell him, it has made its views on this topic clear to past Ministers. That does not mean that it is in the right on this matter. Parliament is legislating for a very specific form of cancer, because of very specific issues, not least that the victims are completely innocent and that the condition from which they suffer is entirely preventable. Had they not been exposed to asbestos, they would not have mesothelioma.

I hope that the Minister being asked to resist the amendment is not due to a demarcation dispute between the Department for Work and Pensions and the Department of Health or some other inter-departmental quarrel within Government. These things do happen, but they can be overcome. From listening carefully to the debate on Second Reading and the debate in the other place, I can see that there is cross-party will to overcome such difficulties if that were the obstacle.

Finally, it has been suggested—recklessly I think—that there is a shortage of high-quality research applications, which I find difficult to believe. The research community would be incensed at the suggestion. The core issue that we are trying to address is the availability of funds for research in this area. My right hon. Friend is absolutely right to have brought forward his proposals, and I hope that the Minister can give us a sympathetic response. If he cannot give a response that is as sympathetic as I know he would personally like, perhaps he will at least commit to take the idea away and to look at the fall-back suggestion of a reserve power to see whether that can progress within Government. It is an idea for which the time has come. The Bill is a real opportunity to do something for our fellow citizens, and I can think of no group more deserving of our sympathy.

Mike Penning (Conservative, Hemel Hempstead)

I thank the right hon. Member for Wythenshawe and Sale East for his amendments. I will try to address the points made in his speech. I also thank the right hon. Member for Newcastle upon Tyne East for drawing on his experience of hypothecated levies. He is absolutely right that the Treasury is no different now from how it was under his Government.

I will touch on the detailed discussions that took place in the other House, in particular the amendment tabled by Lord Walton, which ended in a close Division. One reason why the Government carried the vote in the other place was the fantastic speech by Earl Howe, who is as well-respected there as he is here, during which he committed to increasing capabilities around research. I am not one of those who have been critical of the quality of the research, but there has been some duplication and there is some scepticism about research in this area, which may be based on the financial situation or, as the right hon. Member for Wythenshawe and Sale East mentioned, the high-profile nature of other cancers.

Since Earl Howe made his comments, a meeting was jointly chaired by Lord Freud and Earl Howe, and the highlighted notice, which needed to go out to researchers, has gone out. Researchers have been invited to a seminar in early 2014, so that bids can be co-ordinated. I do not know whether the right hon. Gentleman has seen the letter that I wrote to him yesterday. It was put on the board rather late last night, and because there were no votes, I was conscious that he might not have received it. I will arrange for it to be passed to him.

Paul Goggins (Labour, Wythenshawe and Sale East)

As the Minister is looking at a letter that he wrote to me, but which I have not yet seen, may I have a copy of it?

Mike Penning (Conservative, Hemel Hempstead)

I will arrange for it to pass through certain channels. The snail post is working rather well.

I have great respect for the work of the British Lung Foundation, particularly the research around the tissue bank. I understand that funding will continue to into 2015. I also completely agree that we need to share that research around the international community and not hold it ourselves. We particularly need to share that expertise with third-world countries. We sold them asbestos and, perhaps even in our late empire days, put this horrible product into their environments. They have been left to clear up the mess and we need to work very closely with them.

The issues around research are very important—there is funding from central Government. The Department of Health is very keen to utilise this and bring it together. I believe that we should give it an opportunity to move forward and achieve that. Voluntary funding is an interesting package. It is right that only the four larger companies have been involved in this and I pay tribute to them. While they are the larger companies, they are not the entirety, nor are they the people who are legally responsible. In many cases, we cannot trace the insurers, which is why this fund of last resort has been established.

I will make a negative and a positive point. To do the 1% will bust the deal, so we will move to 4%. I did not do the deal, but I respect the deal and it is in place with the insurers, so we have the 3% levy. I also want to put on record that, while I will not put a backstop position in the Bill, if the voluntary approach proposed by Lord Howe does not work, we will revisit this and bring legislation forward should we need to do so. I do not want to jeopardise the agreement now—we would have to go into a whole set of new negotiations—but if it does not work, and I accept there is some scepticism across both Houses, we will come back and revisit this. But we need to give this an opportunity, which is why I respectfully ask the Committee, if possible, not to accept the amendments from the right hon. Member for Wythenshawe and Sale East, because the biggest issue will be around the agreements we have with the insurance companies and I do not want to jeopardise the agreement that we all want to come through.

Paul Goggins (Labour, Wythenshawe and Sale East)

Earl Howe is respected across the House of Lords and I acknowledge that. I also pay tribute to Lord Freud whose negotiations cannot always have been easy. I do not apologise for the fact that we want to press a little further, but I acknowledge the work that Lord Freud has done and the respect with which Earl Howe is regarded in the other place.

We have a piece of legislation here and decisions to make about whether we can use this opportunity to improve it. I listened very carefully to the Minister’s concluding comments that, if the voluntary approach as outlined by Earl Howe and others does not come to fruition, he is prepared to come back and legislate at some future point. He did not immediately say what vehicles would be there, but the Department for Work and Pensions regularly has legislation, so we all need to think about that. A clear commitment by Ministers to look at this is now on the record, but that is in the future. The point made by my right hon. Friend the Member for Newcastle upon Tyne East and others is that the need is now.

We have research which, because of the contributions of the four companies, is now in its early stages. That needs to continue and we need new research proposals to come forward. I am pleased that the Minister did not undermine the credibility of the quality of the research proposals. In fact, he seemed to acknowledge that the quality is there and that will be warmly welcomed by the medical research community, and is the basis on which we should work. What is missing is not high-quality bids, but the certainty of the funding. That is what is missing. I hear what the Minister says but £400,000 in 2011 compared with more than £5 million-plus for two other forms of cancer that have similar mortality rates tells its own story. As much as Ministers are trying to accelerate the profile of mesothelioma for research purposes, there is a lot of catching up to do. I have to say, I am not persuaded that the attention that is now being given will get it to the level that it needs to be at in the very short term. I know that those who are engaged in this research and want to bring forward proposals are very perplexed and concerned about that.

I put forward the proposal for a reserve power, and the Minister has interpreted that in a slightly different way. He does not want to put that on the face of the Bill but he is prepared to see if the voluntary approach works and then maybe come back at some point in the future with legislation. The problem with that is that it is missing the boat; it is missing the opportunity that now presents itself. My right hon. Friend, in a previous role, had important decisions to make about what legislation would be in a particular programme and what would be out—he will remember that with great affection, as will those who were on the receiving end of some of his decisions. These things are not easy. We cannot just rely on a Minister saying, “Maybe sometime in the future legislation will come,” as it is not always that easy. I acknowledge that the Minister said that in a constructive way, and I respect him and am grateful to him for doing that.

I thought long and hard about this issue. I think it would be right to have a levy, using the opportunity of this legislation, of 1% at the most of the value of the general levy that will have to paid by the insurance companies. It is a modest amount. If £3 million is split by 150 it is £20,000 each. One would pay according to the market share, but it will not be a million miles away from that. We are talking very modest amounts of money to gain great good for those who are suffering so much simply because, as the hon. and learned Member for Sleaford and North Hykeham said earlier, they went out to work. That was the only thing that they did wrong. We owe them so much and this is a modest proposal.

Nevertheless, there is time between now and Report for further thought to be given to this. There is time for the insurance companies to sit down with Ministers and actually say, “Yes, we mean it; we really can make a voluntary approach work. We can structure this, guarantee payments and we can come up with an amount of money.” If the Minister was able to report that back to us on Report, we would be heartened by that.

Mike Penning (Conservative, Hemel Hempstead)

I can assure the hon. Gentleman that Lord Freud and I will be having meetings with the insurance companies and I will raise this particular issue. If we can come to a consensus that does not break the 3% threshold then I would be more than happy to bring that back on Report.

Paul Goggins (Labour, Wythenshawe and Sale East)

That is a very important commitment and I thank the Minister for making that intervention. We now have an approach to this that I think could work. He and his ministerial colleagues will sit down with the insurance companies between now and Report really to thrash out what a properly funded voluntary scheme might look like; one that would deliver the kind of investment in research that experts know is needed, and that we in our hearts know is needed. If the Minister is prepared to do that before Report, and if he is able to give us a positive response on Report, we will all feel that the arguments made in this place and the other place will have been effective.

Mike Penning (Conservative, Hemel Hempstead)

If we can come to an agreement—that is important. I will have the discussions and I will do my level best, but I cannot make promises that are out of my hands. It will be the insurance companies that will have to decide.

Paul Goggins (Labour, Wythenshawe and Sale East)

I acknowledge that. I know the Minister is not giving us a cast-iron guarantee other than that he will meet the insurance companies and have this discussion with them. My own understanding is that many insurance companies are prepared to make a permanent contribution to research. What they are concerned about is that, unless there is a statutory underpinning, some will not want to pay it, and that is the problem. If the Minister can go away, have discussions with the industry and come back with a properly worked-out, albeit voluntary, scheme that we can rely on to produce the money the research community needs to make the advances we all want to see, we would all welcome that. He says that if the voluntary approach will not work, he is prepared to come back at some future point with legislation. My preference would have been for him just to stand up and say , “I accept the amendments. They all make sense.” However, he has given us a way forward that holds out some promise, so let me respond in the spirit in which he has engaged in the debate by not pressing my amendment to a Division. I beg to ask leave to withdraw the amendment.

Clause 2 - Eligible people with diffuse mesothelioma

Nick Brown (Labour, Newcastle upon Tyne East)

I beg to move amendment 62, in clause 2, page 1, line 15, leave out ‘25 July 2012’ and insert ‘4 April 1979’.

Philip Davies (Conservative, Shipley)

With this it will be convenient to discuss the following:

Amendment 2, in clause 2, page 1, line 15, leave out ‘25 July 2012’ and insert ‘10 February 2010’.

Amendment 6, in clause 3, page 2, line 44, leave out ‘25 July 2012’ and insert ‘10 February 2010’.

Amendment 64, in clause 3, page 2, line 44, leave out ‘25 July 2012’ and insert ‘4 April 1979’.

Nick Brown (Labour, Newcastle upon Tyne East)

I want to speak first to the more modest of the two amendments in my name, but I will speak to the other one too.

Those who have followed this issue might ask how far back we would want to put the date. After all, the Bill deals with people who are in the direst circumstances, and their life expectancy is short, so the question might be, “Why does this matter?” Of course, the answer would be that it matters not just to the victims themselves, but to their close relatives and other beneficiaries.

The two dates in my amendments are 10 February 2010 and 4 April 1979. It would have been possible and rational to go back much further. The date when the damage caused by inhaling asbestos dust was first definitively known about can be traced back to before the second world war, and it would have been possible to table an amendment including a date that took us back that far. I suppose it is a sign of my moderation and willingness to find common ground that I have gone back only as far as 4 April 1979.

There is a widespread feeling that the start date the Government have chosen for the Bill is mean and as narrow as possible. There is at least a case for going back to the start of the consultation. I remind the Committee that the original consultation document was issued under the previous Labour Government, and it is a great credit to the current Government that they carried the consultation through. Somebody in the Government must have championed it.

Mike Penning (Conservative, Hemel Hempstead)

The champion is Lord Freud; he is the one who pushed and who had the really difficult negotiations with the insurance companies—they did not just stroll in one afternoon and say, “We would like to do this.” He dragged them in and thrashed a deal out. He then had detailed debates during the Bill’s passage through the other House. He is the champion who took the consultation on from where it was.

Nick Brown (Labour, Newcastle upon Tyne East)

I am grateful to the Minister for his intervention. It is right to give credit to the ministerial champion of this proposal. I was not quite certain which group of Ministers was in favour of it and which had reservations, but it is now the policy of the Government, and none of them will be opposed to it.

A statutory scheme has been under consideration by Governments for some time. I say that with some authority, because when the Department for Work and Pensions was first formed, I was the first Minister with responsibility for work. I had responsibility for these issues and chaired departmental meetings on the possibility of getting such an agreement with the insurance industry. Indeed, for the purposes of transparency, I am quite willing for my papers from that era to be put into the public domain so that people can see what was under discussion and what the difficulties were. There was not unanimity in the Government then.

Chris Bryant (Labour, Rhondda)

No, there was not.

Nick Brown (Labour, Newcastle upon Tyne East)

My hon. Friend intervenes from a sedentary position to confirm what I said, which is helpful.

Chris Bryant (Labour, Rhondda)

I intervened not because I disagreed with my right hon. Friend, but because we disagreed with some other people, who shall remain nameless.

Nick Brown (Labour, Newcastle upon Tyne East)

Exactly so, but I ask myself, with the advantage of hindsight and the distance of time, why should Patricia Hewitt remain nameless?

Mike Penning (Conservative, Hemel Hempstead)

I am very grateful for the tone and empathy that the right hon. Gentleman uses in his speech. I have been a Minister in three Departments in the last 14 months and I have never understood why certain papers that would really help the public understand what the Government’s thought processes were do not get published. A problem I have had is that all I am allowed to see is the consultation. If he was involved in any of those discussions, it would be really useful if those papers could be released, although I do not know the process for that. I was not involved in any of those understandably difficult discussions with the insurance companies to get us to this position. That is why I am so locked into the 3%, as I am sure the right hon. Gentleman will appreciate.

Nick Brown (Labour, Newcastle upon Tyne East)

I am grateful to the Minister for his intervention. We are not quarrelling among ourselves, so I think the Committee will make good progress. The Opposition’s amendments are designed to be constructive.

It would help wider public understanding if the papers from previous Governments—I am not the only Minister who tried to make progress on this issue—were put into the public domain. If the present Minister requires any consent from me to see the ideas that we explored, what I tried to do, where that went right and the reasons why it did not come to fruition as quickly as I wanted, inasmuch as it is for me to say, I am more than happy for the papers to be put into the public domain. It is always difficult to speak for others, but I would not expect any resistance from the former Secretary of State for Work and Pensions, my right hon. Friend the Member for Oxford East (Mr Smith), who had oversight of what happened at that time. Those papers would help inform future debates.

Like the Minister, I do not understand why the papers on every single issue that previous Governments try to address have to be withheld from the incoming regime. As he will have discovered, 90% of public administration is prosaic and it is hard work. Differences of opinion can be within the governing party as well as between it and the Opposition. Often, there is no specific Conservative or Labour view on a topic, but different judgments and points of view from the individuals who hold ministerial office. Perhaps the best way forward—certainly on this issue—is evidence-based decision making and I think we could all stand up and say that that is what underpins this Bill.

On both my amendments, my plea is that the start date be pushed back a bit. How far is, of course, a matter of subjective judgment to some extent. One could make a case, as I have said, for going back some way. It is not so much for the victims themselves, although they are at the forefront of our mind, but for their dependants, their relatives and those who may, tragically, be the beneficiary of the award when it is made. I should have thought that a reasonable compromise would be to settle, as the Labour Front Bench has done, on the start date of the consultation. The expectations of those who follow these things would have been, once the consultation had started, that there would be a scheme.

It is to the credit of the Conservative party that no Conservative Member has suggested that there should not be a scheme. It was readily taken up and found ministerial champions in the new Government. I have tried to follow the debate as closely as anyone can. I am genuinely interested in it. But it has struck me that not a single person has said that there should not be a scheme. There are arguments against statutory arrangements. There are arguments against what could be regarded as an intervention in arrangements that should be left to the civil law and the private sector. But no one has made these arguments. Everybody accepts that there has been a failure, that the victims are left without anywhere to go and, indeed, that some employers who, as the law requires, had paid for their employers’ liability insurance had then been let down by the insurers for a whole range of reasons.

Historically there is also the case of people who cannot find the insurer or trace their former employers. That is particularly the case with contracting in heavy industry. Therefore, it is the events that gave rise to the legitimate expectations, that is the publication of the consultation document, which will have led people to believe that the Government were consulting on having a scheme and that there would be a scheme. Had there been widespread opposition to it, the argument would be undermined. But there has not been any opposition to it at all, as far as I know.

Paul Goggins (Labour, Wythenshawe and Sale East)

I am looking at the various dates that my right hon. Friend has suggested. There will have been arguments down the years about whether the industry should or should not do something. But what is irrefutable is that in February 2010 a message went to the industry that something would happen and therefore from that point at least the industry should have been making preparations. Does he agree with me?

Nick Brown (Labour, Newcastle upon Tyne East)

Of course, I agree with that. It seems a reasonable point. If we were looking for a compromise, my opinion is that that is where the compromise should be, tempting as it is to make the case for the earlier date, or even earlier dates. It is always important in politics to try to find the middle ground. I would submit to the Committee that the middle ground is, as my right hon. Friend said in his intervention, at the start of the consultation rather than at a later date.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I do not want to detain the Committee long. It is a huge pleasure to follow the right hon. Member for Newcastle upon Tyne East, who advanced his amendments with considerable force. The question for the Committee, quite apart from those amendments, is this. The justification for the scheme is that it would give payments to those who cannot trace the employer who negligently exposed them to the fibres that caused the mesothelioma, or that employer’s insurers. In those circumstances there must be a question mark as to why there should be any start date at all. This scheme is being funded by the insurance industry on the basis that it received premiums in the past for risks that it agreed to bear, which have manifested themselves but for which they have not been obliged to pay.

If that is the justification for this scheme—and as I understand it, it is—there is no justification for any start date at all. Anybody who cannot trace an employer or an insurer should be entitled to compensation. That is consistent with the purpose of the scheme. The difficulty throughout, which the Minister already alluded to in his intervention on the right hon. Member for Wythenshawe and Sale East, is the same difficulty relating to the amendments not moved but spoken to a moment ago by the right hon. Gentleman. That difficulty is the figure of 3%.

The insurance industry has been clear that the cost of the scheme must be kept within 3% of the gross written premium. That is necessary in order for there to be no rise in the cost of premiums for this type of compulsory insurance, for those whom the legislation obliges to buy it. I understand that, and the Minister alluded to it just a moment ago. I say to the Minister that I can see no justification for any start date at all, other than the 3%, which I understand. I can see no justification, other than the 3%, for not accepting that there should be a research levy, whether hypothecated or not.

We will come on to this in due course, but I point out to the Minister that a huge pot of money is sitting there, completely untapped by the Bill. That pot of money lies in the hands of the reinsurers, who are not obliged to contribute to this scheme but who none the less received premiums in relation to the risks that have eventuated. The direct insurers have not paid for these risks, but will now be paying. The amendments that I subsequently tabled, to which we will come in due course, relate to payments bringing reinsurers within the scope of this scheme and this levy. If the Minister is prepared to look at that, it opens up another pot of money. That would enable the funding of the research levy, on which the right hon. Gentleman spoke during the last group of amendments. Not only that, but it would also enable us either to move back the dates to the date that the right hon. Member for Newcastle upon Tyne East suggests in his amendment or to have no start date at all, as indeed must be the logical and proper conclusion to his argument.

Kate Green (Labour, Stretford and Urmston)

I am very much looking forward to the debate on the amendments that the hon. and learned Gentleman tabled in relation to the role of reinsurers. For the moment, if we accept that the figure of 3% is the constraint on amendments such as those in this group and the amendment tabled by my right hon. Friend the Member for Wythenshawe and Sale East in relation to research, perhaps the hon. and learned Gentleman would like to comment on my calculation that backdating the start date to February 2010 would raise the cost over 10 years to £451 million, which is 2.99% of the gross written premium.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

If the hon. Lady is right, and the Minister is suggesting that the hon. Lady’s amendment cannot be made because of the figure of 3%, then obviously that would be a bad argument. However, if the hon. Lady is asking me to comment on her maths, I am afraid that I have not done the calculation myself. It is always a mistake to ask me to comment on anything mathematical. She may or may not be right; I do not know. If she is right, then she has a good point and no doubt the Minister will have to deal with it, and if he does not accept the amendment then he will have to explain his other reasons for that. If it is not a good point, and in fact her amendment tips us over the 3%, then the Minister will no doubt deploy that argument. I cannot say one way or the other which is right, although I am sure that others in the Committee can. That is really all I wanted to say on this group of amendments.

Ian Lavery (Labour, Wansbeck)

It is a pleasure to serve under your chairmanship, Mr Davies. This is an extremely important issue, and I want to come to the point in a slightly different way. I want to focus on the pain and suffering this has caused, not to the insurance companies by the cost it will have for them, but to the people who will miss out—and who have missed out—because of the cut-off date, for which 25 July 2012 has been suggested. The Minister will recall that we discussed it very carefully on Second Reading, and during the course of the debate it went from February 2010 to—I think—1969. Then somebody corrected the guilty date of knowledge of mesothelioma to, I think it was said, 1965. So we had a wide and varied debate on what the date should actually be.

My hon. Friends on either side of me have suggested that there should be some middle ground here. Perhaps there should be, but between February 2010 and 25 July 2012—is that the middle ground? In reality, we have had people dying from mesothelioma for over half a century, and probably before that as well. We keep talking about the 3% levy and the cost to the insurance companies. What about the cost of life for these individuals, who only went to work and suffered as a consequence of negligence, not only by the insurance company but greatly as a result of the employer? It was mentioned that it could be heavy industry. Most of the Labour team have constituencies where that has occurred.

Mike Penning (Conservative, Hemel Hempstead)

I represent a very working-class area, although there was not the sort of heavy industry that there was in the north-east in particular. Many MPs across the House have cases in their constituency. The key is that, as the right hon. Member for Wythenshawe and Sale East said, it is not just about heavy industry. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) served in the fire service with me—not in the same brigade, but at roughly the same time or perhaps a little earlier. There were issues about the fire service. As I alluded to during the debate following that terrible crash in Glasgow the other day, there will have been no thought processes about what they were rushing into or about the age of the building. So this is not just about heavy industry. As the research goes forward we are starting to realise that, even though I know it is a really difficult situation. My point is that Members across the House are affected.

Ian Lavery (Labour, Wansbeck)

I thank the hon. Gentleman. I was coming to that, because again, we have had this discussion at great length. Of course, this does not involve just heavy industry. One could argue that, in the main, the people who suffered from mesothelioma were not in heavy industry. The Minister mentions the fire service. I had a meeting with the fire service only two weeks ago and one of the main items on the agenda was asbestos. It was not just the fact that the fire brigade run into fires when everybody else runs out, which I am sure everybody would agree is unbelievably bad. Funnily enough, they also mentioned the fact that they fit fire alarms in people’s properties and were drilling into asbestos roofs. Mesothelioma just needs one little bit to lodge in the lungs and it could lie latent for 30, 40 or 50 years. If that happens and you are diagnosed as having it, you have a life expectancy of nine months to two years. So I totally accept that it is not just heavy industry; it is across the board.

Another issue, which is not in the Bill, is asbestos in school properties. That causes me great concern. We often talk about the teachers who have died. Lots of them—up to 10,000 teachers—have died in a very short space of time because of mesothelioma and asbestos-related disease. What concerns me is the kids. There is no record at all of children who are exposed to asbestos in these schools. If teachers are dying with asbestos-related diseases in schools, the children are exposed to the same levels of asbestos. I think it is fair to say that. One could not argue against it, but as far as I am aware, there is no record anywhere of the potential for children in schools to die as a result of asbestos-related diseases, including mesothelioma.

Let me return to the issue of the cut-off dates. In my previous occupation I was heavily involved with the mineworker schemes for vibration white finger, chronic obstructive pulmonary disease—chest disease—and the pneumoconiosis scheme which, I think, was concluded in 1979. I was still at school then, by the way, but we sought to better the situation. In court cases and litigation, the most important point was always the guilty date of knowledge. As far as the Bill is concerned, the guilty date of knowledge is 25 July 2012. That is the date from which people will be paid. I think that that is terribly unfair, and it has been chosen only because that is the date on which Ministers—I am not criticising Ministers from any particular party—got around to doing something about the matter.

A letter from the Minister to everyone who spoke on Second Reading, which is dated 6 December, states:

“Several colleagues proposed alternative start dates for the scheme eligibility. The fundamental issues here are around legal expectations and affordability. The expectation for eligibility was deliberately set as early as we could arrange it, once the scheme had been agreed. Whilst I understand the desire to include as many people as possible, February 2010 is not a legitimate date to use as the consultation did not indicate the intention to create a scheme and indeed one of the options proposed was ‘do nothing’. At that point in time, there was no certainty what, if any, scheme would be pursued by government. Only from 25th July 2012, could people have an expectation that they would receive payment.”

Although I welcome the Bill, just because we as politicians got around to saying on a certain date that there might be a case for it, which gave sufferers an expectation that they would receive compensation—remember, those with mesothelioma suffer only for a short while because they die, which is not the case with diseases such as vibration white finger or pneumoconiosis—that is no justification whatsoever for setting that date as the cut-off point. There is no good reason behind that. We should be looking at the middle ground, somewhere between 1965 and 2013. Doing so may present great difficulties, but we must have some justification for the cut-off date, because it means a great deal to a whole lot of people.

I will not go into too much detail, but there is a chap in my constituency who was diagnosed before the proposed cut-off date, so he cannot apply. He received some £23,000 in compensation, but if he had been able to apply he might have received as much as £350,000. That is the sort of difference in compensation that many people will suffer because of the cut-off date.

We are compensating people here. What sort of message does it send out if people cannot apply because they were diagnosed before the cut-off date? How many people are we talking about? These are people who suffer from a disease that was likened on Second Reading to having a tree growing inside them, which spreads its branches until the sufferer simply dies. It is like drowning, because their lungs fill up. It is the most excruciating and horrendous disease. It is unimaginable. Only those who suffer from it, and their families, can truly explain it. I pay tribute to everyone who has insisted on bringing the Bill this far, because it has been needed for many years. For the sake of its being a really good Bill, rather than an okay Bill, we should consider the cut-off date. We should ensure that people who have suffered as a consequence of mesothelioma—only for going to work, as has been said—get rightful compensation. The cut-off date should be as far back as we can possibly make it. The Bill is to compensate people who have suffered, and their families, so we should not preclude hundreds, thousands and possibly tens of thousands from getting rightful compensation.

Kate Green (Labour, Stretford and Urmston)

I want to speak to amendments 2 and 6, tabled in my name and that of my hon. Friend the Member for Rhondda, and to support the ambition in the amendments tabled by my right hon. Friend the Member for Newcastle upon Tyne East.

Amendment 2 would set a start date for the scheme of 10 February 2010 and amendment 6 repeats that start date in relation to later references in the Bill. We have already heard compelling arguments for as early a start date as we can possibly manage, recognising that we have not recently come to knowledge of this illness. The knowledge of its existence and effects, and the industry’s role in collecting premiums and therefore, presumably, reserving for possible future risk, has not arisen only since 25 July 2012.

As my right hon. Friend said, we have selected the date of 10 February 2010 in our amendments, and this is a moderate suggestion to an industry that has been collecting premiums in respect of this industrial illness over many years. That is the date at which, under the noble Lord McKenzie, the then Labour Government launched a consultation, at which point it is arguable that the insurance industry was crystal clear about the intentions of the Government and what would follow.

It is important that we remember that, in that short period between 10 February 2010 and the proposed start date of the scheme of 25 July 2012, an additional 700 people will have died of this disease without any recourse to compensation. If we were to go back before 25 July, in total more than 6,000 victims have died without any payment recognising their right to justice.

I recognise that, between the launch of the Labour consultation in February 2010, the change of Government and the response to the consultation, and the legislation being developed in 2012, there was a requirement on current Ministers, particularly the noble Lord Freud, as the Minister mentioned, to engage in complex, detailed discussions with the industry. I do not suggest that nothing was being done between the close of the consultation period and 25 July 2012, and I do not underestimate, either, the scale of the task faced by Lord Freud in negotiating with the industry. The Minister said on Second Reading that the Government had been

“in deep negotiations—there is no argument about that; it will all come out—but the insurance companies did not just stroll up to Lord Freud’s office and say, ‘By the way, can we do a deal?’ They were dragged there”.—[Official Report, 2 December 2013; Vol. 571, c. 724.]

The Minister has repeated the words, “dragged there”, today.

We understand that there has been a protracted period of discussion with the industry, but it is clear that, going right back to February 2010, the industry could be in no doubt at all that some scheme would be put in place because the consultation document issued by the Labour Government made it pretty clear what kind of scheme was likely to evolve.

The original DWP consultation published in February 2010 stated clearly:

“We want to see more done to ensure that individuals who are unable to trace insurers are given better support…Arguments have been made suggesting that as drivers are compensated by the Motor Insurance Bureau (MIB) where they are involved in an accident with an uninsured driver, so injured workers who had no control over the recording of EL”—

that is, employer liability—

“policies should have, at the very least, protection when they are injured or made ill at work.

Having considered this carefully, the Government are persuaded that an ELIB should form part of the package of measures to improve the lives of those who, for whatever reason and through no fault of their own, have been injured or made ill as a result of their previous employment and who are unable to trace an old employer or their insurer. The ELIB would be the compensator of last resort if all other efforts to trace an employer or insurer have failed. An ELIB could be loosely based on the MIB whose obligations are linked to the compulsory insurance requirement of the Road Traffic Act”.

That is not the Government saying, “We’re thinking that it might be an idea if…”. It is pretty clear that we intended that from February 2010, that that would be the model established, and the insurance industry was on notice at that time. Although I was obviously not privy to the discussions taken forward then by Lord Freud when the present Government came into office, I have no reason to believe that that was not also the starting point for the discussions with the industry, and that that model is exactly the one that has ended up in the Bill. What is more, the idea that there might have been other possibilities—

Stephen Phillips (Conservative, Sleaford and North Hykeham)

The hon. Lady is making a powerful case in relation to the consultation, but what is the relevance of the consultation or what it said? The fact is that the industry accepted premiums for risks that have eventuated, presumably reserved for that event and therefore has a pot of money that would have been used if the employer could have been traced, because the employer would then have pursued the insurance. Why have any date at all, whether by reference to the consultation or otherwise?

Kate Green (Labour, Stretford and Urmston)

I agree with the intellectual thrust of that intervention, but I also accept the constraint that we discussed earlier during his speech. If Ministers feel that nothing can be done beyond the context of the 3% levy—we will be debating that proposition later—the start date of 10 February 2010, by my calculations, sits within the limit of the 3% levy over a 10-year period. The Minister may question my arithmetic, and I am sure that the whole Committee would benefit from seeing the sums properly worked through, but that is the basis on which I have been prepared to accept that most limited of start dates.

Arguably, at that point, the precise nature of the scheme began to crystallise, so the industry began to understand exactly what it would have to prepare for. However, the thrust of the remarks of the hon. and learned Member for Sleaford and North Hykeham is absolutely right. The industry has been collecting premiums for decades. It must therefore have anticipated that there was some risk associated with the collection of premiums and the carrying out of that business for decades. Why should that money not now be deployed to the benefit of sufferers?

It is also worth noting that the Motor Insurers Bureau model was the only model referred to in the consultation. The scheme’s funding is derived from any company offering motor insurance in the UK; members contribute to the MIB levy and supply data to the motor insurance database. That is exactly the model being introduced in relation to employer liability insurers.

Mike Penning (Conservative, Hemel Hempstead)

In a previous incarnation, I was a Transport Minister with responsibility for the insurance industry. The hon. Lady is absolutely right that that is the only other compulsory insurance that we have. The interesting thing, though, is that the insurers pass on that cost directly to the policyholder through the premium. This fund of last resort is not intended to be passed on by the insurers. Specifically, we are not trying to penalise businesses today for mistakes made in the past, whereas the MIAB does pass on costs to policyholders. I do not think that the comparison which I saw within the consultation fits perfectly with what we are discussing today.

Kate Green (Labour, Stretford and Urmston)

I accept that the costs will be held within the industry in the scheme now before us, but we are talking about a multi-billion pound industry that can easily afford to bear that cost. We are also talking about a rather more constrained and very specific illness in relation to mesothelioma, whereas obviously the ambit of motor insurance is much broader, but I take the Minister’s point.

However, the industry must have been aware, since 2010, that something new would be happening that would finally begin to crystallise the financial obligation that they have had to victims over many years. We simply cannot accept that an industry whose very raison d’être, whose very lifeblood is the assessment and management of risk would not at least have made some sort of prudent provision from February 2010 to meet the potential new responsibility that would arise if the consultation did indeed move to the kind of scheme that was proposed therein.

My right hon. Friend the Member for Newcastle upon Tyne East and the hon. and learned Member for Sleaford and North Hykeham have suggested that 2010 would be a very modest start date, particularly when we know that the cause and long-latency characteristics of mesothelioma have been known since early reports in the 1930s. The insurance industry should have therefore been reserving against asbestos claims 50 years or more ago. Certainly—as my right hon. Friend has mentioned—when the Newhouse and Thompson report was published in 1965, the Sunday Times reported on how epidemiological investigation by Newhouse and Thompson for the London School of Hygiene and Tropical Medicine had shed light on the origins and nature of mesothelioma. However, it was the 1930 Merewether and Price report that had warned of a latency of some 25 years in terms of asbestos-related illness. There have been many decades of knowledge in relation to this matter and the industry should have been prepared.

Paul Goggins (Labour, Wythenshawe and Sale East)

I am sure that my hon. Friend is aware that the estimated value of the potential claims by people who had mesothelioma and subsequently died is estimated at around £800 million.

Kate Green (Labour, Stretford and Urmston)

I am grateful to my right hon. Friend for sharing that figure with the Committee. I think that may be of interest when we discuss amendments in terms of the amount of payments that victims are to receive and the extent of generosity which could be expected from an industry that has been doing very well over many decades from the premiums that it has collected.

My argument is that at the very minimum, a pretty specific model has been on the table since February 2010. Even if the industry believed that it was only a consultation and that it would never come to fruition, given its existence as an industry is about the management of and the preparation for dealing with risk, it would have begun business planning to meet that possibility. It has, after all, been collecting the premiums to support it in meeting that contingency over many more decades and therefore, it is right that it should now be correcting the injustice that many victims have suffered over many years.

My contention is that a start date of 10 February 2010 is entirely affordable. It is an extremely modest extension of the scheme in comparison to the many years of what my hon. Friend for Wansbeck has called “guilty knowledge” and in relation to the many years over which insurance companies have been collecting premiums. It is certainly an amendment that would be widely welcomed by victims and their families. I hope that the Minister will at least be able to comment on the possibility of other opportunities to make the scheme more generous in other ways, although I know that we will debate that later in our proceedings.

Mike Penning (Conservative, Hemel Hempstead)

I thank right hon. and hon. Members for their contributions on these amendments. I agree with my hon. and learned Friend the Member for Sleaford and North Hykeham that it is an arbitrary matter. If the insurers are not taking the insurance, how far does it go back? A line has to be drawn in the sand somewhere. In principle and from an intellectual point of view, I completely agree with him. However, we are where we are today, and this is a fund of last resort for those who cannot trace their employer and thus their employer’s liability insurance. We could have decided on myriad different dates, and in our negotiations we decided on 25 July 2012.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I know that we will come to my amendments on reinsurers in due course, but does it follow from what the Minister has just said—I am sure it does—that if more could be found, he would agree that there should be no arbitrary cut-off date because we would remain within the 3%?

Mike Penning (Conservative, Hemel Hempstead)

My hon. and learned Friend touched on the 3% a moment ago, and I am afraid that it will come up time and again. Negotiations took place, and it is of course possible theoretically to bring in others, and thus more money, within the 3%. We will debate other insurers later.

The shadow Minister quoted extensively from the consultation. I tried to be open and honest in the letter I sent to everyone who contributed to the debate, and the one thing that was sitting on the back of that was the set of options, one of which was to do what has been done under previous Administrations of both colours: nothing. I accept that the insurers should have realised in 2010 or earlier that at some time some Government would do something about the matter, but they did nothing for years, which was one option. We were not bound by consultation by a previous Administration because of the closeness to the last election, and I am sure that the Opposition would not want to be bound by consultation that we held just before an election, even if they thought it was a good idea to introduce legislation.

I understand how difficult it will be for anyone who had a loved one who sadly died from this horrible disease on the wrong side of the cut-off date. There will be losers and gainers, but I want the Committee to concentrate on the fact that some people will benefit, and we must ensure that they get that benefit as soon as possible. I want to be open and honest. We estimate that setting the date in 2012 instead of 2010 will affect around 700 people and the cost would have been £80 million, as the shadow Minister said.

Going back to what the right hon. Member for Wythenshawe and Sale East said, although it is difficult to estimate, the assumption is that around 6,000 extra successful applications would cost in excess of £800 million. I want to be open and honest about the figures, which are out there in the ether. The key is that we have an agreement within the 3%. If I break that agreement, we will have to renegotiate.

We will discuss at length later the mathematics and the shadow Minister’s qualifications and calculations, but many people are doing the maths for me. We may not agree, but we are trying our best. I hope that the Committee will not accept the amendment and that we stick with the Government’s proposal.

Paul Goggins (Labour, Wythenshawe and Sale East)

On more than one occasion this morning, the Minister has reminded the Committee that 3% is the golden rule, but my hon. Friend the Member for Stretford and Urmston made the point that according to her calculations—we look forward to hearing more about this later—it would be possible to go back to February 2010 and remain within the 3% limit, which is the golden rule according to the Minister. If my hon. Friend’s maths are proved to be correct—she is very accurate in mathematical calculations—will the Minister be prepared to look again at the start date in the light of new evidence?

Mike Penning (Conservative, Hemel Hempstead)

I have to look at the evidence that has been produced for me and is being used extensively. The scheme will run for 10 years and there will be understandable movement in the calculations, so nothing is fixed. I do not think anyone will be absolutely spot-on. The shadow Minister thinks that he is absolutely spot-on. My officials think that they are absolutely spot-on. The estimated cost on top would be £80 million, which would take us over the threshold, so I am not willing to accept that we should do what is proposed. I think that it would break the agreement.

Kate Green (Labour, Stretford and Urmston)

Can the Minister confirm whether that £80 million is over the four years or over 10 years?

Mike Penning (Conservative, Hemel Hempstead)

I believe that it is over the four—no, it is over the 10-year period. That has just been indicated to me in case I made a mistake on that point.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I am a little confused, as I am sure many members of the Committee are, about the numbers. It would be helpful—if not today, then before the Bill is reported back to the House—if the Minister undertook to write to the Committee, setting out why the figures given by the hon. Member for Stretford and Urmston would push the costs over the 3% of gross written premium, so that we can all be satisfied, at least for the purposes of Report, that that is the case. I know the Minister very well and know him to be a deeply honourable and straightforward person. I take the Minister at his word, because I am sure that if it were under 3%, he would be accepting the amendment.

Mike Penning (Conservative, Hemel Hempstead)

Once we have seen the hon. Lady’s calculations, I will be more than happy to do that, so that the whole House will have an opportunity to look at this when we come to Report. What I am saying is that I am not willing to accept the amendment. I will write to the Committee, but I will also ensure that the document is available to the whole House by placing it in the Library, which I think is what the hon. Member for Rhondda is indicating from a sedentary position that he wants. I will do that. With that in mind, I hope that the Committee will not accept the amendments as tabled.

Nick Brown (Labour, Newcastle upon Tyne East)

I have listened carefully to what the Minister has said and I have to say that I do not find it persuasive. My own instinct would be to push my own amendment to a vote, but that is not the united view of the Opposition. Bearing in mind the views of my colleagues rather than my own, I beg to ask leave to withdraw the amendment.

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 3, in clause 2, page 2, line 4, leave out

‘and is not eligible to receive a specified payment’.

Philip Davies (Conservative, Shipley)

With this it will be convenient to discuss the following:

Amendment 4, in clause 2, page 2, line 4, after subsection (e) insert—

‘(f) save as provided in (g) below, the application is made within three years of being first diagnosed, and

(g) for those persons first diagnosed on or after 25 July 2012, but before this Act comes into force, the three year time limit in section 2(1)(f) shall commence on the date this Act is brought into force.’.

Amendment 5, in clause 3, page 2, line 35, after subsection (d) insert—

‘(e) save as provided in (f) below, the application is made within three years of the death of the person with the disease, and

(f) for those persons who died on or after 25 July 2012, but before this Act comes into force, the three year time limit in section 3(1)(e) shall commence on the date this Act is brought into force.’.

Amendment 11, in clause 18, page 10, line 45, leave out subsection (3) and insert—

‘(3) In specifying circumstances in which a person is, or is not to be treated as, eligible to bring an action for the purposes of section 2(1)(d), or section 3(1)(c), the scheme shall ensure consistency with the definition of eligibility in section 2 and section 3.’.

Kate Green (Labour, Stretford and Urmston)

The amendments deal with a number of different issues, so I will speak to each of them in turn. Amendment 3 is intended to remove a loophole that would allow the scheme potentially to direct nearly all prospective claimants to much lower levels of product liability compensation. The amendment has been tabled to deal with the likely exclusion of former workers from the scheme proposed in the Bill, leaving them dependent on other insurance products, which would mean that they were likely to receive less than they would if they were enabled to access this scheme.

There was discussion in the House of Lords about what the specified payments were to be, and on 7 June, Lord Freud wrote to peers to confirm which payments were to be specified under clause 2. The specified payments that he has listed in that letter are those under the Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order 2006, the Armed Forces and Reserve Forces (Compensation Scheme) Order 2005, the UK asbestos trust established on 10 October 2006 for the benefit of certain persons suffering from asbestos-related diseases and the employers’ liability scheme trust established on 23 November 2006 for the benefit of certain persons suffering from asbestos-related diseases, and a payment from any Government Department, authority, body corporate or employer exempted from insurance under section 3 of the Employers’ Liability (Compulsory Insurance) Act 1969.

There was extensive discussion in the House of Lords about the situation where the Government were the employer and that included the situation in relation to the armed forces. It was recognised that the Government effectively self-insure and that they will not therefore access the employers’ liability market, hence the logic for excluding Government departments and armed services from the ambit of this scheme.

That is not the case for former employees of Turner and Newall. Lord Freud’s letter is quite clear that the two trusts that I listed are the more commonly known Turner and Newall trusts. Turner and Newall was historically the UK’s largest asbestos company and is currently one of the largest, by volume, asbestos defendants in this country. In October 2001, Turner and Newall entered into administration in the UK in the context of very considerable pressures on the company’s global and, particularly, US business. In the UK, a number of funds were established to pay creditors, but the vast majority had insufficient assets to pay creditors in full and accordingly most are receiving only a partial dividend.

Our concerns are that the product liability insurance offered by the Turner and Newall trust for compensation at a much lower rate than offered through this scheme will mean that former employees of Turner and Newall will have to be at least eligible to access the product liability cover that would have been on offer and the funds that are available to meet those claims. That would mean that, as currently worded, they would be precluded by this section from applying to the diffuse mesothelioma payment scheme, even if they made no claim and received no payment from any of the Turner and Newall schemes. The purpose of the amendment is to remove what could be a very useful loophole to the insurance industry.

Amendments 4 and 5, which cover the same issue in clauses 2 and 3, are on a different issue of particular importance. They relate to the date of diagnosis of a mesothelioma sufferer. The current provision is that the sufferer will have three years from a diagnosis in which to make a claim to the scheme. As we have heard, the prognosis following diagnosis is well short of three years, so it is obviously envisaged that either the sufferer or his dependants may be the beneficiaries of any payment under the scheme. But it is also important to recognise that that is quite a short timescale in terms of the complexity of assembling the necessary information and evidence to enable a claimant to access the scheme. There is the need to check whether a previous employer or employers can be traced and the need to establish whether those employers’ insurers can be traced or are still in existence. I will speak on subsequent amendments about the need to provide medical evidence and the delays that can arise.

It would be useful if the Minister could give a specific assurance in relation to a matter that was raised by Lord Browne in the House of Lords. In the course of that debate, on 22 July, he stated that he had received informal assurances from officials:

“Finally, the most important point that has arisen from my engagement beyond Parliament with the Bill team is that during my conversations and in correspondence with those advising the Minister it was explained to me that it was the Government’s intention that, when a person was diagnosed with diffuse mesothelioma on or after 25 July 2012 but before the Bill comes into force as an Act, application to the scheme would have to be made and received by the scheme administrator not later than three years after the date on which it comes into force, not three years from 25 July 2012. That would be a very welcome relaxation of the limitation rules, given the nature of this dreadful disease and how quickly it can become fatal.

Unfortunately, the draft rules make no mention of that relaxation and there is no such relaxation anywhere in the Bill. However, there is a very specific relaxation in draft rule 7, where a person has died on or after 25 July 2012 and the claim is made by an eligible dependant. That very significant concession is known to me and is now known to all Members of your Lordships’ House. It requires some parliamentary acknowledgement or commitment, at the very least. More than that, it requires some commitment that the regulations will deal with this in an explicit way”.—[Official Report, House of Lords, 22 July 2013; Vol. 747, c. 1052.]

The draft rules make no mention of the relaxation and we therefore look to the Minister for that specific commitment today.

Finally, amendment 11 is about specifying circumstances in which a person may or may not be eligible to bring a case to the scheme. It would require that those circumstances be consistent with the definition of eligibility in sections 2 and 3. I am not sure what clause 18(3) is intended to achieve and whether it is to limit access to the scheme in some way in relation to what is provided elsewhere in the Bill. This, too, was raised by Lord Browne on Third Reading in the House of Lords. He pointed out that clause 18 introduces circumstances where someone could or could not access the scheme and said that he assumed that the details of that would follow in regulations. Again, I have not yet seen anything to explain in detail what those eligibility criteria will be and, indeed, I have no idea why there might be any additional eligibility criteria that are not already covered by earlier provisions in the Bill.

My concern is that, if there are to be further eligibility criteria laid down, these should be subject to parliamentary scrutiny. If the Minister can assure me that that will be the case when the regulations come forward, that would certainly be welcome. There was no clarity from the Minister in the House of Lords, Lord Freud, about the Government’s intention in relation to this clause and I therefore hope that the Minister will give us some clarity this morning.

Mike Penning (Conservative, Hemel Hempstead)

I fully understand where the Opposition amendments are coming from and I will try to address each issue as we go through. Let me first address Turner and Newall, as it is commonly known. This is supposed to be a fund of last resort when dependants who have suffered from this disease cannot get the financial help that they deserve from other sources. If they have received money from the Turner and Newall scheme, they would be excluded from this scheme, although, on the face of it, some of them may get less than they would do from this scheme. However, because of exemptions in the legislation that created the Turner and Newall scheme, there will be no clawback of benefits or anything else, which, in most cases, would have taken them over the limit.

Kate Green (Labour, Stretford and Urmston)

Will the Minister comment on two points? First, I accept what he said about there being no clawback of benefits, but the level of compensation that people receive under the Turner and Newall scheme is typically substantially less than the amount that they will receive under this scheme. Secondly, people could be prevented from claiming not because they have made a claim or received money from the Turner and Newall scheme, but because they can potentially make a claim, not in relation to employers’ liability, but to product liability. Is it the Government’s intention that people should use the scheme when they have no access to redress under other employers’ liability insurance, or when they have no access under any insurance policy at all?

Mike Penning (Conservative, Hemel Hempstead)

As I understand it, it is under any insurance policy at all. If I am wrong about that, I will write to the hon. Lady. As I said, the Turner and Newall compensation will allow for benefits and other lump sums to be held; they will not be clawed back. Under the scheme of last resort, the benefits that claimants have received will be clawed back. I will deal with that later in the debate. There are a range of payments, and people should try to receive moneys from whatever sources they can, for the simple reason that this is a fund of last resort.

On the three-year rule, to which the noble Lord Browne referred in the other place, the compensation will come into force on the day that the regulations come into force, not on the day that the Bill is enacted or from 2012. That is important. I hope that addresses the issues that the hon. Lady raised.

Amendment 11 seeks consistency when a person

“is not to be treated as…eligible to bring an action for the purposes of section 2(1)(d), or section 3(1)(c)”.

It would apply when, for example, a company is in liquidation or administration. It would ensure that the insolvent employer would not be able to pay such damages. It is important that claimants’ civil cases are not affected by the amendment. I am not a lawyer, but I have been told by my officials that this is an important part of the Bill. When a company becomes insolvent, we must ensure that the administrators do not interfere with the compensation that should be paid. I hope that I have addressed the issues that the hon. Lady raised, and that she will withdraw the amendments.

Kate Green (Labour, Stretford and Urmston)

I am grateful for the Minister’s assurances on amendments 4 and 5, and I will withdraw them both. He gave a more generous response than I asked for, which was very welcome. I am not a lawyer either, so I would like to consider further what he said on amendment 11. It would be helpful if he would write to me—he indicated that he will—so we can return to this matter on Report if necessary.

I am disappointed about the Minister’s response on amendment 3. It seems that we are not at one on the spirit of the Bill and on the scheme being a last resort. Victims see it as a scheme of last resort to be used if an employer or insurer cannot be traced, specifically in relation to the employer’s liability insurance. It would be unfortunate if claimants were precluded from accessing the scheme.

Philip Davies (Conservative, Shipley)

I remind the Committee that with this we are discussing the following:

Amendment 4, in clause 2, page 2, line 4, after subsection (e) insert—

‘(f) save as provided in (g) below, the application is made within three years of being first diagnosed, and

(g) for those persons first diagnosed on or after 25 July 2012, but before this Act comes into force, the three year time limit in section 2(1)(f) shall commence on the date this Act is brought into force.’.

Amendment 5, in clause 3, page 2, line 35, after subsection (d) insert—

‘(e) save as provided in (f) below, the application is made within three years of the death of the person with the disease, and

(f) for those persons who died on or after 25 July 2012, but before this Act comes into force, the three year time limit in section 3(1)(e) shall commence on the date this Act is brought into force.’.

Amendment 11, in clause 18, page 10, line 45, leave out subsection (3) and insert—

‘(3) In specifying circumstances in which a person is, or is not to be treated as, eligible to bring an action for the purposes of section 2(1)(d), or section 3(1)(c), the scheme shall ensure consistency with the definition of eligibility in section 2 and section 3.’.

Kate Green (Labour, Stretford and Urmston)

As the Minister is not minded to accept the spirit of my amendment, I should like to press it to a Division.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I beg to move amendment 14, in clause 2, page 2, line 6, at end insert

“‘insurer” includes any entity which has succeeded to the liabilities of the insurer with whom a relevant employer maintained employers’ liability insurance at the time of a person’s exposure to asbestos;’.

Philip Davies (Conservative, Shipley)

With this it will be convenient to discuss the following:

Amendment 15, in clause 2, page 2, line 15, at end insert

‘and includes a successor in title to any such employer’.

Amendment 18, in clause 3, page 2, line 48, at end insert

“‘insurer” includes any entity which has succeeded to the liabilities of the insurer with whom a relevant employer maintained employers’ liability insurance at the time of a person’s exposure to asbestos;’.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

These amendments ought to be entirely uncontroversial. I hope that the Minister, even if he feels that he has to have a write round in due course, although it is difficult to see what the purpose of that would be, will indicate today that they are likely to be accepted on Report. Each amendment is concerned with the same issue, which is the fact that clauses 2 and 3 do not contain a definition of “insurer” at all or a definition of “employer” that is sufficiently broad for the purposes that the Bill is designed to deal with.

Amendments 14 and 18 propose inserting a definition of “insurer” so that an insurer will include

“any entity which has succeeded to the liabilities of the insurer with whom a relevant employer maintained employers’ liability insurance at the time of a person’s exposure to asbestos”.

The amendments are important if the Bill is to work. Insurance companies are from time to time sold, and successor companies may or may not fall within the definition of “insurer” in the Bill as drafted. It would be a good thing, in my respectful submission to the Committee, to make that clear beyond doubt.

Insurers, as the Minister no doubt knows, periodically review the books of business that they are writing and they sometimes effect transfers of those books of business under part VII of the Financial Services and Markets Act 2000. As the Bill stands, there would be a good argument that an insurer that had succeeded by that mechanism to the liabilities of an insurer that had afforded employers liability insurance to a relevant employer within the definition in the Bill would not be caught. That would plainly be a lacuna in the Bill, and therefore the definition plainly needs to be inserted in clauses 2 and 3.

I can deal equally briefly with amendment 15, which would amend the definition of “employer”, by observing that, again, it is designed to put the matter beyond doubt, because a relevant employer ought, of course, to include any entity that has succeeded to the liabilities of a negligent relevant employer who cannot be traced but who would be liable to a claimant suffering from mesothelioma for the purposes of the scheme.

All three amendments are drafting amendments, and all of them are, without question, not only desirable but necessary. Given that, although I will withdraw them—with the leave of the Committee—if the Minister will not accept them today, I hope that he can indicate to the Committee that he will, in due course, come back to them on Report and that they will be moved as Government amendments.

Mike Penning (Conservative, Hemel Hempstead)

I thank my hon. and learned Friend for the tone in which he moved his amendment. We will look carefully at these amendments as we go forward. One of my concerns, particularly as this is a fund of last resort, is that we in no way put more onerous restrictions on those who we want to benefit from the fund, after they have already been through quite an exhaustive process and not found their employer or their employer’s insurer.

I am pleased that my hon. and learned Friend has indicated that he will withdraw the amendment. I do not believe at this stage that I will be able to support them, but I will look carefully at them again on Report.

Nick Brown (Labour, Newcastle upon Tyne East)

I am now rather more uncertain than I was when the hon. and learned Member for Sleaford and North Hykeham moved his amendments. Is it his intention in amendment 14 to deal with the point about reinsurance? He is shaking his head, so I see that that is not his intention. In that case, why were the points that he has picked up, which he says are intended just to clarify the Bill, not picked up in the other place when the Bill was discussed there or by the public servants who are there to assist the Minister with the drafting of legislation? Why does the Minister not have in front of him a comprehensive set of statements that explain either why the amendments are not needed or that they touch on reasonable points and that he will take the arguments on board and return to these matters on Report? Surely, the answer to these points must be either one or the other.

Mike Penning (Conservative, Hemel Hempstead)

Will the right hon. Gentleman give way?

Nick Brown (Labour, Newcastle upon Tyne East)

I am quite happy to bring my remarks to a conclusion, but I am sure that, if the Minister wanted to respond to them, the Committee would agree leave for him to do so—if it has to do that, which it probably does not.

Mike Penning (Conservative, Hemel Hempstead)

To clarify matters for the right hon. Gentleman and for my hon. and learned Friend the Member for Sleaford and North Hykeham, I do not think—it is set out in front of me—that these amendments would bring anything new to the Bill, but I do not want just to reject out of hand their comments and proposals, which were not suggested in the other place or during our drafting of the Bill. I do not want to be rude and reject them out of hand. On the basis of what I have in front of me, no, I cannot support the amendments, but I will generously—I hope—and in the right tone look at the proposals as we go forward.

Nick Brown (Labour, Newcastle upon Tyne East)

I think that that is fair enough.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I am grateful to the right hon. Member for Newcastle upon Tyne East for what I think is his support and to the Minister for his comments. However, I have to say to the Minister that it does not matter whether the issues that the amendments address were or were not raised in the other place, and it does not matter whether or not his officials or, indeed, those who are responsible for the drafting of the Bill have overlooked these issues.

We will come to another drafting error in a moment, which is absolutely plain to see, but both points need to be addressed in the Bill either by the mechanism that I have suggested or by one that the Government prefer. If they are not addressed, the Bill will be defective for the purposes for which it is brought before the House. However, on the basis of what the Minister has said and taking it in good faith that the matter will be looked at—I am happy to meet his officials—I beg to ask leave to withdraw the amendment.

Clause 3 - Eligible dependants

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I beg to move amendment 16, in clause 3, page 2, line 39, leave out ‘assume’ and insert

‘it is to be assumed’.

Philip Davies (Conservative, Shipley)

With this it will be convenient to discuss amendment 17, in clause 3, page 2, line 45, leave out ‘assume’ and insert

‘it is to be assumed’.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I can be brief in relation to these amendments. The reason for inserting

“it is to be assumed”

is not only that the drafting in the clause is inelegant, but that we simply do not use in statutory drafting—in this country or anywhere else—that form of imperative. It would make more sense and would be easier to apply if the words that I have suggested replace the word “assume” in subsections (2) and (4).

Mike Penning (Conservative, Hemel Hempstead)

I accept that not only in legalistic but in plain English terms, the amendments are valid. However, I feel that they would have no effect on the clause. I am sure my hon. and learned Friend will accept that, as I explained earlier, at this stage I cannot accept them. They would cause real issues, not least with ping-pong with the other House, and we need to get the Bill on to the statute book. The fund needs to be operating, so that compensation can be given to needy recipients by July, and I think that the amendments would affect the Bill’s progress. I therefore ask my hon. and learned Friend to withdraw his amendment.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I agree with the Minister that there is no difference between the two amendments, but his job is not to protect the amour propre of officials or parliamentary draughtsmen; it is to put clear legislation in place. Given that the Minister has indicated there is no difference between the two and that my formulation is, I venture to suggest, better, and that there is absolutely no prospect of playing ping-pong with the other place and since there is no difference in reality, although I hope that he will come back on Report with these proposals as Government amendments, on the basis of what he has said today, I beg to ask leave to withdraw the amendment.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I beg to move amendment 19, in clause 3, page 2, line 48, at end insert—

“‘relevant employer” means an employer who, at the time of the person’s exposure to asbestos—

(a) was required by the compulsory insurance legislation to maintain insurance covering any liability arising because of the exposure to asbestos, or

(b) would have been required by the compulsory insurance legislation to maintain insurance covering any liability arising because of the exposure to asbestos if the legislation had been in force at that time; and

(c) includes a successor in title to any such employer.’.

The amendment is important and I shall trespass on the Committee’s patience by asking that the clause be examined. The Committee will no doubt have observed that in clause 3 there is a reference to “relevant employer”, as there is in clause 2. The Committee will also have observed that the definition of “relevant employer” is contained only in clause 2, where subsection (2) begins with the words “In this section”, and there then occurs a definition of “relevant employer”.

Given that there is no definition of “relevant employer” in clause 3, the interpretation of the legislation if it comes before the courts will be that Parliament intended—at least, this is one possible interpretation—the words “relevant employer” in clause 3 to have a different meaning from that in clause 2. That is plainly not the intention; it is plainly an oversight in the drafting of the Bill. It is plainly something that should have been picked up by the Minister and his officials or in the other place, but it has not been, and it is plainly something that needs to be addressed.

The definition that I suggest is exactly the same as the definition in clause 2. I do not see the difficulty in accepting the amendment. It is clarificatory, as it needs to be, of what Parliament intends if the Bill receives Royal Assent in due course.

Kate Green (Labour, Stretford and Urmston)

I rise briefly to speak strongly in support of the amendment. It is absolutely clear in the minds of the Committee or anyone who has debated the Bill until now that the understanding of what is meant by a relevant employer in clause 3 should be no different from clause 2. It is imperative that we follow the hon. and learned Gentleman’s expert and excellent advice and get the drafting right.

Mike Penning (Conservative, Hemel Hempstead)

My hon. and learned Friend the Member for Sleaford and North Hykeham has demonstrated thoroughness in his examination of the Bill, especially in introducing the amendment. He might have introduced it not least because he is worried about eligible dependants who do not immediately appear to meet the eligibility criteria in the Bill. However, I can assure him that in clause 3(1)(a), the eligibility criteria outlined in clause 2 are brought to bear. I understand his points, but my legal team does not agree with his learned opinion. Although I will consider the measures in the period between now and Report, I must disagree with him on this occasion, as I did earlier. As I said, we will consider it again, but on the basis of the evidence before me, the amendment is not required, so I ask him to withdraw it.

Nick Brown (Labour, Newcastle upon Tyne East)

Surely the point of the amendment is that it puts the matter beyond any doubt whatever. I must say that until the hon. and learned Gentleman put it into my mind, it had not occurred to me that we would use different definitions in different clauses, but now that he has explained it, I can see how somebody might argue in front of a court that that was not only arguable, but could be inferred from Parliament’s intentions. That is not what is intended—my hon. Friend the Member for Stretford and Urmston made the view clear, and the Minister has not contradicted it—so why do we not just agree to the amendment and put the matter on the record and clearly beyond doubt once and for all, since it is what the Minister intends?

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I am extremely troubled by what I just heard from the Minister. I cannot be any clearer. It has nothing to do with clause 3(1)(a). In line 25, on page 2 of the Bill, occur the words “relevant employer”. I am asking the Minister to look at that now. In clause 3 of the Bill, there is no definition of the term “relevant employer”. If he goes back in the Bill to line 8 on page 2, for the purposes of clause 2, there is a definition of “relevant employer”, but if he looks at line 5 on page 2, he will see that it is solely for the purposes of clause 2. I think that I heard the Minister say that his legal advice differs from the opinion that I am urging on the Committee. I cannot see how it possibly could.

Mike Penning (Conservative, Hemel Hempstead)

I do not intend in any way to discredit my hon. and learned Friend. I have considered the amendment in the Committee’s presence. I will consider it again between now and Report and, if he is right, I will table the amendment then to alleviate the situation, but I will seek advice between now and then. I will seek his help with my officials in doing so, because we probably cannot afford his services in any other way. [ Laughter. ] That was not meant in a derogatory way; it is the skills that he brings to the Committee that I would use.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

That is normally a joke that I use against myself. The Minister has said that if I am right, the Government will make the amendment. As right hon. and hon. Members will know from newspaper reports, I am paid a great deal outside this place to be right. On this occasion, I am right. I look forward to the Government bringing forward the amendment on Report. I beg to ask leave to withdraw the amendment.

Clause 4 - Payments

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 7, in clause 4, page 3, line 4, at end insert

‘but shall not be less than 90 per cent of the average civil compensation recovered by mesothelioma claimants.’.

Philip Davies (Conservative, Shipley)

With this it will be convenient to discuss the following:

Amendment 9, in clause 4, page 3, line 4, at end insert—

‘( ) The Secretary of State shall provide for there to be an annual independent assessment of the average amount of civil compensation recovered by mesothelioma claimants, and of payments made under the scheme, and for there to be a report thereon laid before each House of Parliament.’.

Amendment 12, in clause 4, page 3, line 4, at end insert

‘but shall not be less than 100 per cent of the average civil compensation recovered by mesothelioma claimants.’.

Amendment 66, 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 67, in clause 4, page 3, line 4, at end insert

‘but shall not be less than 110 per cent of the average damages recovered in civil mesothelioma cases.’.

Amendment 20, in clause 4, page 3, line 5, at end insert

‘but shall not be less than the average damages which a person diagnosed with diffuse mesothelioma would recover against a relevant employer who had negligently or in breach of statutory duty caused or permitted that person to be exposed to asbestos.’.

Amendment 21, in clause 5, page 3, line 5, at end insert

‘but shall not be less than 80 per cent of the average damages which a person diagnosed with diffuse mesothelioma would recover against a relevant employer who had negligently or in breach of statutory duty caused or permitted that person to be exposed to asbestos.’.

Kate Green (Labour, Stretford and Urmston)

These amendments go to the heart of the Bill and the generosity of the scheme for sufferers of mesothelioma and their families. Amendment 7 in my name and that of my hon. Friend the Member for Rhondda seeks to increase the rate of payment from the currently proposed 75% of average civil compensation to 90%. My hon. Friend the Member for Wansbeck has proposed a rate of 100%; my right hon. Friend the Member for Newcastle upon Tyne East has suggested 110% and the hon. and learned Member for Sleaford and North Hykeham has suggested 80%. It is clear that every amendment tabled about the rate indicates the unacceptability to the Committee of the current proposal.

I recognise that the rate of payment is not specified in the Bill; we assume we will see it in regulations. It is important to have the debate about rates in Committee where we have the opportunity to influence—indeed dictate—what appears in the regulations. If possible, it is important to include a rate in the Bill in order to provide certainty to mesothelioma victims.

A number of factors could affect the level of average civil compensation. Amendment 9, to which I will speak later, suggests an annual review and report of that level to Parliament. That would ensure that, if the scenarios envisaged in the impact assessments are wildly different from what transpires, Parliament would be able to act quickly to ensure sufferers are properly protected. It is the common will of all in the House to have as generous a scheme as possible.

Kate Green (Labour, Stretford and Urmston)

Our priorities for the legislation are to ensure that the scheme is as generous as possible for sufferers and their families; that the money in the scheme is protected; and that account is taken of anything that might change the context in which payments under the scheme are set if the level of average civil compensation were to change. Parliament will want to keep a close watch on that, which is why in amendment 9 I have proposed the annual review and reporting to Parliament of the average civil compensation.

Colleagues have proposed a range of compensation levels stretching between the Minister’s proposition of 75% all the way through to a level of 110%, which was suggested by my right hon. Friend the Member for Newcastle upon Tyne East. My hon. Friend the Member for Wansbeck suggested 100% and the hon. and learned Member for Sleaford and North Hykeham suggested 80%. Those are all an improvement on the Government’s proposed 75%. It is important to remember that 75% represents an uplift from what was originally proposed in the House of Lords. The original proposition was that the level of payment would be set at 70% of average civil compensation.

It is worth noting that in early impact assessments, the figure of 75% was being used, so it has always seemed that 70% to 75% has been pretty much a settled case from the outset for the insurance industry. Although I sympathise with the Minister’s characterisation of negotiations with the industry having been in the context of their having to be dragged into the meeting room, it does seem that they pretty much got the level of payment that they were always entirely comfortable with. As legislators, we should be unwilling to simply roll over and accept the level of payment that seems to suit the industry, but which is not in the best interests of victims.

It is also worth recognising that the imperative on the industry to pay as generously as possible has to be seen, as was said this morning, in the context of its collecting employers’ liability insurance premiums for many decades. It has been a highly profitable market for insurers. For many years, as victims have reported, the industry has been reluctant to pay out, to put it mildly. Indeed, victims talk of an industry that has done everything it can to wriggle out of payments. It has been absolutely determined to avoid paying a single penny, so I think it is right that we should seek redress now from that industry to an extent that is both just for victims and, I contend, comfortably affordable for a multi-billion-pound industry. That is what the amendments in this group seek to achieve.

It is also worth looking at the affordability of the scheme over different time scales. The Government are extremely keen to use the four-year time frame to test the affordability of the scheme for the industry. It is not obvious why that four-year time frame has been set, except that it happens to come up with the right answer—from the industry’s point of view—of 75%. However, helpfully, the impact assessment provides information on the cost of the scheme to the industry over a 10-year time frame, and we know that the industry itself does not see this as a four-year or a 10-year scheme.

The Association of British Insurers acknowledges that the scheme is expected to last for 30 or 40 years, so I do not think we should feel constrained by the four-year time frame when thinking about the right level of payment for mesothelioma sufferers. I think there is considerable merit in the argument that I expect my hon. Friend the Member for Wansbeck will be advancing shortly, which is that there should be no difference for sufferers accessing this scheme, in the level of payment that they receive, from those who are able to find their employer and their employer’s insurer, because the fact that sufferers are not able to do so is absolutely no fault of their own. I understand that the Minister will say that this is a scheme of last resort, it should not be too easy for people to come to it and if a valid insurer can be traced, that company should pay out. We will hear an argument from my right hon. Friend the Member for Newcastle upon Tyne East on other ways to square that circle that would not penalise victims who make perfectly legitimate claims on the scheme because they cannot find their insurer, but would also ensure that the scheme is incentive-based and to be used as a last resort. All insurers would therefore not be obliged to share in the costs of one company that can be identified.

It is difficult to make any moral case that victims accessing the scheme should receive a lower payment than those who can trace their employer’s insurer. It is particularly invidious that they should lose 25% of the compensation that would be available if they were able to pursue the civil route, as it is not their responsibility that the insurer cannot be traced. One in eight employers’ liability records are untraceable, so a substantial number of victims will be forced to rely on the scheme, and a substantial proportion will receive less than they otherwise would have done.

The difficulty in tracing those employers’ liability insurance records could be because they have been lost. We recognise that these are long-tailed claims, often relating to several employments several decades ago, but victims and people campaigning on behalf of victims hold firm views that the insurance industry has in some cases set out deliberately to suppress or destroy records at certain times in its history. If that occurred, it would be wrong for the individual victims to bear the consequences. In any event, even when the documentation was unintentionally lost or mislaid, because of the passage of time or other reasons, the fact that that will be cause for discrimination against those victims bears little moral weight. That is particularly the case because of the scheme design, with a technical committee assessing objectively whether insurance existed, albeit that the documentation is no longer available. Prima facie, to access the scheme there will be acceptance that an insurance policy was in place at the relevant time. It is therefore difficult to say that those victims should receive less.

For that reason, I take some exception to the assertion by the Association of British Insurers that lower than 100% compensation levels are necessary to maintain an incentive for people to trace a relevant insurer to claim against, which was its response to the Bill’s publication. Victims are far from shopping around for the best deal they can get in what are the most appalling circumstances for them. The ABI’s assertion ignores the full process required under the legislation. There is a strong argument for much more generous compensation, and it will be on all hon. Members’ minds that that starting point, both intellectually and morally, should be 100%.

It is also worth drawing comparisons with the level of payment available in other schemes. The Minister was reluctant to allow me to compare this scheme with the Motor Insurers’ Bureau scheme, but the original DWP consultation published in February 2010 did exactly that. It drew an absolute comparison between the Motor Insurers’ Bureau’s scheme and what is now proposed. So it is not illegitimate to suggest that we use that scheme as a model for what might be right in this scheme.

The Motor Insurers’ Bureau’s scheme was the only scheme described in the Government’s 2010 consultation. It has two relevant schemes that we should look at in this context: the uninsured drivers scheme and the untraced drivers agreement scheme. The uninsured drivers scheme covers compensation claims arising from accidents caused or contributed to by an uninsured driver. When it is shown that no insurance policy exists to cover the responsible party’s vehicle, the MIB will consider a claim from the victim for compensation. Liability must be assessed, but because the negligent and uninsured party has been formally identified, the MIB recognises that the innocent victim has rights of full legal redress when fault is proven.

When the claim is proven, full compensation is offered to cover the cost of replacing or repairing the vehicle, hire charges, loss of use, property damage, personal injury damages and legal costs in full. That is exactly analogous with the situation when it is confirmed that a policy of employers’ liability insurance was in place. It seems to me that when that confirmation has been received by the technical committee, the same argument can be made about the level of compensation.

Michael McCann (Labour, East Kilbride, Strathaven and Lesmahagow)

Paragraph 12 of the explanatory notes states that

“such employees would in principle have a good claim in negligence against their employer”

but

“they are often in practice unable to recover compensation: by virtue of the”

time lapse and the fact that they could not trace the original insurance claim. Nowhere in the document is it suggested that 100% of the premiums were paid by the employers involved? Does that not lead to the irresistible logic that in negotiations with insurance companies we should always hold out for 100%, given that they received 100% of the cash in the first place?

Kate Green (Labour, Stretford and Urmston)

My hon. Friend makes a valid and reasonable point. Indeed, the insurance company will have based those premiums on the expectation of risk, but its absolute purpose as an industry is to define and determine them so as to ensure that it can meet its obligations and deliver a profit to its shareholders. I do not think it has been suggested that those premiums were unnecessarily low to enable the insurance industry to meet those two requirements. My hon. Friend makes a valid point.

Employers will, of course, have paid their employers’ liability insurance premiums in the expectation that if claims were made against them, they would have been able to draw down in full against their own insurance policies. It is not clear why that would cease to be the case because an employer or insurer can no longer be traced by an employee.

The second scheme run by the Motor Insurers’ Bureau is the untraced drivers agreement scheme, which applies to victims of accidents involving hit-and-run drivers. I certainly do not want to suggest that insurance companies are hit-and-run agents, but the situation is again analogous with a victim not having information about an employer’s insurer. The scheme works so that when a driver who is deemed responsible for an accident leaves the scene and is not traced, the MIB will consider a claim for compensation for property and personal injury damages. Some restrictions are imposed, not least the fact that legal fees cannot be recovered in full. The MIB will pay only a fixed amount of £500 plus VAT in compensation towards a victim’s legal fees.

What both schemes have in common is that they offer full compensation in recognition that the victim was not at fault, but was in an accident caused or contributed to by an uninsured driver. There is no obvious reason to treat claimants under the diffuse mesothelioma payments scheme any differently: in no sense is it their fault that an insurance policy is not available under which they could make a claim.

It has been helpful to have the Government’s assessment of the costs to the scheme of each of the different levels of payment, which range between 70% of civil compensation levels as originally proposed in the House of Lords right up to 100%—not, I regret, up to 110%, but we can assume that that would be a little more expensive. The figures the Minister has supplied are welcome and useful, but are for two periods that, arguably, have been picked somewhat randomly to suit the answer that the insurance industry wants. The information supplied by the Minister indicates the level that the levy set at 3% of gross written premium will achieve, first over a four-year period and then over a 10-year period. It also assesses what in practice the proportion of gross written premium would be for each level of payout from 70% to 100%, increasing in increments of 5%.

Interestingly, and perhaps not surprisingly, over a four-year period 75% payouts are the level at which the levy is just within 3% of gross written premium—it is 2.99% at that level. That falls very significantly if we look over the 10-year period for which the Minister has kindly supplied information: a levy at 2.46% of gross written premium would be needed to meet 75% payouts. For payouts at 80%, we tip over the 3% of gross written premium over a four-year period, but over a 10-year period the levy is 2.61%. For payouts at 90%—the subject of amendment 7—we are at 3.56% over the four-year time frame, but even at 90% over 10 years we are still within the 3% of gross written premium, at 2.9%. It is only when the payout is at 95% that even over a 10-year period the percentage of gross written premium tips over the 3% mark to 3.05%.

The impact assessment issued by the Government in November varies from the one available earlier this year. In July, for payouts at 80% over a four-year period the levy was predicted to be within the 3% of gross written premium, at 2.98%. Indeed, over a 10-year period it did not exceed 3% of gross written premium even when compensation payments were set at 100% of average civil damages. So what has changed, and, more pertinently, why—what is the justification for that shift in the impact assessment?

The November 2013 impact assessment explains that the increase in costs is a result of increased estimates for the legal fees that scheme applicants will face. I quote from that impact assessment:

“Successful applicants will receive a fixed amount for legal costs, separate to the amount of scheme payment awarded.”

That is welcome as it means that claimants will receive legal costs on top of their compensation payment. However, the impact assessment goes on:

“Following consultation with APIL”—

the Association of Personal Injury Lawyers—

“and the Forum of Insurance Lawyers…on the likely required legal resource to prepare an application to the scheme, our best estimate of the scheme’s contribution to legal costs is between £5,000 and £7,000. Fixing costs allows us to promote the fair and appropriate charging of legal costs. Fixed costs will also introduce an element of competition amongst solicitors, meaning that people with Mesothelioma or eligible dependants will not be forced to pay more than they should have to in legal fees. The Diffuse Mesothelioma Payment Scheme is being funded through a levy imposed on insurers active in the Employers’ Liability market. It is right”—

according to the impact assessment, and we could not possibly disagree—

“that the highest possible proportion of funds raised go to sufferers rather than legal costs.”

The £7,000 figure now reflected in the November 2013 impact assessment, however, is considerably higher than the £2,000 figure assumed for legal costs in the July impact assessment. Perhaps coincidentally, when the legal costs were raised from £2,000 to £7,000, suddenly the maximum level of payment that could be afforded within the 3% of gross written premium was 75%. That is, as it were, the answer that was first thought of, and we have now been able to work our way back around to achieving the same results. The Minister will say that industry and personal injury lawyers suggested the £7,000 figure as a truer view of the level of costs, in which case, why was £2,000 ever on the table? What was the basis for the suggestion that £2,000 might be a reasonable calculation of the likely level of legal costs?

I suspect that the Minister will also say that it is important to think about the first four years of the scheme, because that will be its most expensive part. I understand that we expect a spike in claims early on, in particular because people will become eligible to access the scheme from the date of the regulations, as the Minister helpfully pointed out, and from up to three years before that date. So we expect a surge in cases in those early days.

To us, however, it seems that during that initial four-year period the industry is benefiting from a helpful smoothing gift worth £17 million from the Government. In addition, it will be receiving substantial loan moneys of £30 million, also from the Government, to help manage the smoothing over the early years. That seems to be exceptionally generous to a multi-billion-pound industry when the effect is to depress the rate at which sufferers will receive payment.

It is particularly troubling that the Government have chosen to give £17 million to the industry to enable it to manage its cash flow, rather than to use money that is clearly available for the scheme—the Government have been able to find this £17 million to put towards its operation—directly for victims. That does not seem to be the right priority.

It would also be helpful to understand whether the reference in the impact assessment to sufferers receiving a fixed amount for legal costs means that, regardless of the amount spent on legal fees, claimants will automatically receive a payment of £7,000, even if they have spent less. If so, it might be preferable simply to keep that money as properly available for pay-outs and to get the level of legal costs correct.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I will speak about this in due course as well, but I wonder whether the hon. Lady shares my concern about the payment to be made to lawyers in connection with a claim to the scheme having gone from £2,000 to £7,000. Lawyers will simply charge that as a flat fee, come what may, even if only 20 minutes of work is involved. By raising the legal fees from £2,000 to £7,000, we might simply be creating another cottage industry of the sort that we have seen in the past, depriving those who have suffered as a result of the industrial circumstances in which they worked from the compensation to which they are plainly entitled.

Kate Green (Labour, Stretford and Urmston)

I cannot agree more. The hon. Gentleman makes exactly the point that, in effect, the fixed costs become the tariff—that amount becomes what is always charged. There is no incentive for lawyers to ensure that they work as efficiently in the interests of victims as they might otherwise seek to do. I absolutely share his concerns about that.

Paul Goggins (Labour, Wythenshawe and Sale East)

My hon. Friend makes a powerful argument. Has she been able to find any explanation anywhere—from the Minister or any other source—for why the assumption went from £7,000 in legal costs to £2,000, and has now gone back to £7,000? Those are precise, round figures. Has my hon. Friend found any explanation for the rationale?

Kate Green (Labour, Stretford and Urmston)

I regret I have not. Perhaps the Minister will be able to enlighten us as to why it went from £7,000 to £2,000 and back to £7,000 again. I remarked on the coincidence that, at £7,000, 75% becomes the absolute outside limit of what is affordable within the 3% of gross written premium. One can only speculate whether that has any bearing on the figure ultimately arrived at. I am aware that the Minister will say, quite correctly, that there has been discussion with experts in this field, but I cannot help but remark that they would say that, wouldn’t they?

Perhaps the Minister will be able to give us more details about how the £7,000 figure is made up; the nature of the work that lawyers would expect to undertake; how it would be costed; how long it would take; and at what level of seniority in a legal firm and so on. Detailed information from the Minister, which properly supports the £7,000, would be welcome, and more so since the hon. and learned Member for Sleaford and North Hykeham made the important point that it becomes a target figure if it is simply set out with no context, and if it is unjustified.

We are concerned about the way in which the figures have been set and about the level of compensation that has been arrived at. We are concerned about the legal fees and the four-year time frame, which is really a self-defined threshold in the scheme—defined by the industry—but which so far does not appear to have any grounding in logic. We recognise that the pattern of claims will change over time. For example, the age profile of beneficiaries may change and older beneficiaries would expect to receive a lower level of payment to reflect their reduced life expectancy.

The industry has never really given any justification for its contributions to drop dramatically after the first four years. As I said, the ABI itself appears to be working on the assumption that the maximum possible contributions will be made over the full 40-year period that it expects the scheme to run. It stated:

“To put this new body [the Scheme] on a stable footing, we are proposing that these payments be funded by a levy of around £30-35m per year on insurers who currently offer employers’ liability insurance. We expect the scheme to run for around 40 years, until mesothelioma cases no longer arise”.

So if 3% has been defined as affordable by the insurance industry, and if we accept this limit as legitimate—both of those can be questioned during our debates—we must identify the maximum level of scheme payments possible within this limit. By the Government’s own calculations, that is 90%, not 75%.

I spoke about the Motor Insurers’ Bureau scheme, which makes 100% payouts to victims, but we also helpfully have a precedent for 90% payouts. The Financial Services Compensation Scheme, which offers a scheme of last resort, like this scheme, for all customers of financial services, pays 90% compensation, with no upper limit, in the event of the insolvency of an insurance provider.

Other amendments in this group have suggested not only higher levels than my proposed 90%, but there is also a proposal for a payment at a level of 80%, which I suggest is eminently affordable when one takes account of the Government’s own figures. It would put an estimated extra £6,200 in the pockets of victims and their families. We are not talking about small sums of money for families who face real anxiety about the future. We regularly hear reports of sufferers concerned about who will provide for their dependants after their deaths.

Research from June 2013 indicates that 80% is readily affordable within the industry-imposed limit of 3% of gross written premium, even in the first four years when applications for the scheme are predicted to peak. It is true that those figures were subsequently revised, so that 80% is not now deemed affordable within the first four years. It is highly affordable over the 10-year time frame of the scheme, equalling just 2.65% of gross written premium.

We strongly advocate the moral case for the most generous scheme possible. There is a moral case without question that victims who are forced to rely on the scheme because, through no fault of their own, they are unable to trace an employer’s insurer should not be discriminated against, compared with other victims. In our view, there is a strong case for the affordability of a more generous system of payout, certainly at 80% and 90% if we look over a longer time frame. I know other right hon. and hon. Members also want to make the case for more generous compensation. The Opposition will strongly support their arguments.

Amendment 9, in my name and that of my hon. Friend the Member for Rhondda, concerns the Secretary of State carrying out an annual independent assessment of the average amount of civil compensation recovered by mesothelioma claimants, and payments made under the scheme. It also calls for a report on the matter to be laid annually before each House of Parliament.

It is important to have that regular information and reporting to Parliament in order to track levels of civil compensation and how well the scheme reflects affordability for the industry as well as what is going on in a broader context.

There has been a lot of confusion about what may drive levels of civil compensation. I would not blame the Minister for that confusion, but quite a lot has come from work carried out by the Ministry of Justice, going back to the Legal Aid, Sentencing and Punishment of Offenders Act 2012. At that time it was determined, not least due to extensive pressure from my right hon. Friend the Member for Wythenshawe and Sale East and others, that mesothelioma cases would be left out of the arrangements brought in under that legislation to end the conditional fee arrangements that had enabled so many victims previously to obtain legal advice and pursue claims for compensation. I pay tribute to the work of my right hon. Friend and other colleagues on the matter. It was recognised that to remove access to justice for mesothelioma victims in that way would leave many of them particularly disadvantaged.

The Justice Secretary at the time undertook to go away and reconsider the position for mesothelioma victims. Since then we have had repeated stalling from the Ministry of Justice and very little coming forward. There have been repeated promises that something would come forward but little sign of it until—surprise, surprise—as we reach this point with this legislation, proposals begin to come forth. It seems that the Government’s view has been that this legislation and the Legal Aid, Sentencing and Punishment of Offenders Act are, in their words, “inextricably linked”.

As can be seen from the amendments, it is not the view of my right hon. Friend that the two matters are in any way linked. Nonetheless, it raises a question in our mind about what may be driving levels of civil compensation where an insurer can be traced.

Paul Goggins (Labour, Wythenshawe and Sale East)

I am grateful for the kind comments made by my hon. Friend. On this occasion it is not simply a matter of opinion but of fact that these two issues have nothing to do with each other. The Bill is about a fund of last resort for those who cannot find a former employer or an insurance company. The provisions in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 were precisely in relation to civil claims where the employer and the insurance company were known. They have no relationship whatsoever.

Kate Green (Labour, Stretford and Urmston)

I could not agree more with my right hon. Friend. However, I have to say that it has not been the view of the Association of British Insurers that the two are in no way connected. Let us assume for one moment that the ABI may have a point, and there may be some expectation that what the Ministry of Justice decides to do could ultimately have a bearing on levels of civil compensation. At the very least, it would be useful to be able to consider that with an annual report to Parliament. That would help to make sure that my right hon. Friend is correct that there will be no bearing or relationship between the two, and that levels of civil compensation will not fall.

It is quite difficult to assess the impact of the proposals from the Ministry of Justice. Only last week on 4 December, we were taken somewhat by surprise by a written ministerial statement informing us that the Government have apparently decided to abandon the pre-action protocol that would have speeded up those claims. Although the wording of the statement is a little ambiguous, the Government also seem to have abandoned their proposals for fixed costs for these cases. However, the Ministry of Justice has said that it will come forward with more details on what it intends to do, as opposed to what it does not intend to do. We have to maintain a certain scepticism until we see the full details of the scheme.

As a result, we are now in a situation where the impact of any changes to the treatment of civil cases going the normal route—and therefore the levels of compensation that may be secured through that route—has become completely uncertain. We now have no details on that level of civil compensation, and therefore the knock-on effects for those accessing the diffuse mesothelioma payment scheme are equally uncertain. At the very least, amendment 9 would provide the opportunity to ensure that Parliament can keep a very careful track of the amount of payment that will be delivered to beneficiaries under this scheme.

It is also worth noting that the Government have indicated that they will no longer leave the route of conditional fee agreements open to claimants who seek to pursue a civil claim in relation to mesothelioma. One consequence of the removal of the conditional fee arrangements may be that particularly complex or high-cost cases do not get taken forward, as the risks for the claimants are too great. Those most complicated cases, which could ultimately be the cases which secure the highest levels of civil damages, fall out of the system as a result of the changes which the Ministry of Justice has introduced. That would depress average civil compensation, and thus the level of payment received by victims in the diffuse mesothelioma scheme.

It may be that none of these things come to pass. It may be that there is nothing for us to be concerned about, but there is uncertainty at this stage, which is a cause of very deep concern. There is also a certain amount of uncertainty about the figures that the Government seem to think will be needed in relation to legal costs under the scheme. However, it is absolutely certain that the higher the legal costs, the less money will be available for payments to victims.

I hope that the Minister will be receptive to the proposal of an annual assessment and reporting mechanism to Parliament, so that we can keep careful track of exactly what levels of payment will in reality be afforded to victims, especially in the early years of the scheme. It is extremely important that we ensure that the scheme achieves what it is intended to achieve, which is to offer proper protection to victims and their dependants after their deaths. It will be a matter of regret to the Minister as much as anyone if payments turn out to be very much lower than envisaged. All sorts of factors could come to bear on that, and Parliament would want to be advised of that at the earliest opportunity.

In conclusion, amendment 7 proposes to increase the level of payments under the scheme to 90% of average civil damages, which I contend is affordable within the 10-year time frame. Amendment 9 would ensure that we keep careful track of the level of average civil compensation to ensure that this scheme reflects a level of payment that is in the spirit of what is currently intended. I very much welcome other amendments in this group, and I look forward to debating them, and I strongly commend to the Minister the spirit of the whole group, which is that we believe the scheme can be more generous than it currently is.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I shall address amendments 20 and 21, which raise similar issues to those raised by the hon. Member for Stretford and Urmston. I should point out that there is a mistake on the amendment paper because amendments 20 and 21 are, of course, amendments to clause 4. The amendments cannot both be accepted: one suggests 100%, the other 80%. It is the 80% to which I really want to speak, echoing, I hope as briefly as possible, many of the points made by the hon. Lady.

The reason for the 80% is very simple and straightforward. The position that the Government have negotiated—I have to say, I am sure that anyone in government would have negotiated with the insurance industry—is that if there is to be no increase to businesses in the costs of putting in place this very desirable compulsory insurance against employers’ liability, any levy must be kept within a cap of 3%. That is, subject to the points we will be discussing later in Committee, the band or constraint within which the Government are working. That is well understood and I think, from what the hon. Lady was saying a moment ago, that it is well understood by the Opposition.

As matters stood, however, when the Bill was in the other place, the impact assessment to which the hon. Lady has made reference indicated that the estimate of the legal costs which would be paid at that stage was £2,000. If that was right, the Government would be able to introduce a scheme that would accommodate within that 3% of gross written premium, which is the constraint under which they are operating, the ability to pay 80% to those who are able to successfully claim under this scheme and not the 75% which, as I understand it, is the intention.

I laboured long and hard on two evenings last week to find where these figures for fixed legal costs came from. As the right hon. Member for Wythenshawe and Sale East said in an intervention, when the Bill was originally introduced costs were estimated at £7,000. That dropped when the Bill was in the other place to £2,000 and now, without any justification at all in terms of explanation—it may well be right—the figure has gone back up to £7,000. With the greatest respect to the Minister, who is a thoroughly decent bloke, if I can put it in those terms, on Second Reading, when this point was raised, he failed to give us any explanation at all for this alteration in the figures. I would not now be raising the point in my amendments had I been persuaded that £7,000 is the right amount of money for the limited amount of work, in my opinion, that lawyers will have to do in the majority of cases which will be brought under the scheme.

My second point, which I have already raised in an intervention on the hon. Member for Stretford and Urmston, is about the legal fees. It is absolutely right that if we create an expectation on the part of those who will make claims on behalf of very vulnerable victims of mesothelioma that they will get £7,000 a claim that will essentially become the charge. Whether 20 minutes’ work or 10 hours’ work is involved, £7,000 will become what they get. The result will be—or, at least, runs the risk of being—that a cottage industry will be created that will ultimately end up taking money away from the people for whom the scheme exists and who ought to be compensated for the horrible diagnosis that they have had with this horrible disease.

I would like the Minister to address that point. Ultimately, he can perhaps best deal with it by giving an undertaking, having given an explanation of the fluctuating and flip-flopping of the fixed legal charges, which are still estimates, even in the latest impact assessment—there is still no number anywhere in the Bill, although there might be in the draft regulations—that he will take this away, not only on Report, but when the regulations are prepared, and make sure that he negotiates a proper scheme of costs with the Law Society or whoever it will be.

A proper scheme of costs is not just a fixed tariff of £7,000, but one where the cost is as low as possible for each case. Simple cases might have a lower figure, but it might creep up towards £7,000 in more complex cases. In those circumstances, the Minister would create an extra amount of money, which would enable him, when the scheme is formulated, to push the 75% figure upwards, even if it has to be constrained within the 3% of gross written premium, as far as 80%, we hope, and perhaps even beyond.

The Minister could give that undertaking today, and I would be content and, subject to the will of the Committee, would withdraw my amendment. I hope in a spirit of co-operation that if the Minister gives that undertaking today that will be enough for Opposition Members as well, because we should not be playing party politics with this.

Ian Lavery (Labour, Wansbeck)

I rise to speak to amendment 12 in my name and in the name of fairness and justice for the individual. We have heard lots about the insurance companies and what they can and cannot afford, but we have not heard too much about the individuals, the families and the friends who have suffered and the people who have died as a result of mesothelioma. I want to bring that back to the table for a short while, so that we can get to grips with this and understand what people have been suffering. It is terribly important to recognise what happens with mesothelioma victims.

On Second Reading, the Minister said:

“I think we can all agree that working people should have proper protection from personal injury or disease arising as a result of their work. When the principle is breached through negligence”—

Ian Lavery (Labour, Wansbeck)

Before the Division, I was referring to a quotation from the Minister on Second Reading. I will begin again. The Minister said:

“I think we can all agree that working people should have proper protection from personal injury or disease arising as a result of their work. When the principle is breached through negligence or a breach of statutory duty, it is obviously right that that person should be compensated by their employer or their employer’s insurer”.—[Official Report, 2 December 2013; Vol. 571, c. 659.]

That is right. We have been discussing insurance companies and the fact that they think they can afford only 3% for the levy, because over a period of say 10 years it would cost far too much money. Has anybody really thought about those people who are dying, the families who are caring for them and their friends as well?

All we have discussed this morning and again this afternoon are the hard facts of what people can afford and what things are worth. You know what? I might be totally different from many people, but I think that if the employer is 100% guilty—100% liable—they should pay 100% compensation. I have not yet heard any reasonable social answer to why it has been suggested that 75% is a good figure. It is not even a starting figure, because it started in the other place at 70% and went up to 75%.

I am not sure whether, as fair-minded politicians, we should accept this. I am not sure that we should be clapping our hands and thanking the insurance companies for their benevolence because they are proposing with a scheme that will pay 75% of the average of a civil claim. I tend to believe that we should not. I might be old-fashioned, but if somebody is 100% liable, there is no reason why the individual or the family should receive anything less than 100%.

With the scheme, individuals have had to meet the same standards of evidence and burden of proof that would apply in any civil case in the courtroom. It is exactly the same, but the difference is that in a civil case you get 100% of the compensation. That is right. It is logical. It is the way that fair-minded people would deal with such issues. I am at a loss, and I ask the Minister just to give me an idea why, on the social side of things, we should accept 75% or anything less than 100%. What we have come up with today and probably what has been on the table from the other place is that, if we were to pay 100%, the extra cost of the scheme would be £482 million over the first 10 years, and the levy costs would be 3.94% of GWP for employers’ liability insurance over the first four years of the scheme. That represents an increase in costs of more than £111 million over the 10 years. So what? Should we tell these individuals, people who are going to die in the next two or three months or in the next six months, “We are getting you compensation. However, the insurance will only pay three-quarters of what you are due.”?

Stephen Phillips (Conservative, Sleaford and North Hykeham)

The hon. Gentleman makes an impassioned plea. Everyone in the Committee will probably agree that there is no moral case at all for anything less than 100%. The difficulty, however—I wonder whether he agrees—is that if we go over a cost of more than 3% of gross written premium, the insurers will pass it on to businesses. Therefore, that will increase the costs to business, which will end up funding this scheme, and it will cost jobs. So a balance must be struck. That is the only reason why anything less than 100% is justifiable, despite the very powerful moral case that the hon. Gentleman advances.

Ian Lavery (Labour, Wansbeck)

I thank the hon. and learned Gentleman for that intervention. He makes the point for me. I could not go and explain this to a woman who was about to become a widow, and there is no doubt about that by the way. There is no possibility of these individuals being cured. Once they are diagnosed with mesothelioma, they have between nine months and two years to live. I would find it extremely difficult to say to a woman who was about to become a widow, “Listen, we understand that you’re going to lose your husband, and by the way we understand that it’s the employer’s fault. There isn’t any doubt about that. It’s their fault that you are losing your husband and your kids are losing their father. And we understand that the insurers have lost the papers. It’s 100% their fault, but listen, you really should understand that we cannot give you what you are due. You have to understand, Mrs X, that the insurance companies don’t have lots of money nowadays and that they have come to the table, so really you should be happy that 75% of the compensation will be paid. You might be about to lose your husband, but if the insurance companies paid 80% or 90%, that would increase the 3% levy and that could mean the loss of jobs, Mrs X, in the insurance business.”

Of course I understand the point that the hon. and learned Gentleman makes, but I am trying to get people to see this issue from the victims’ side, not the insurance companies’ side. Clearly, it is not good enough—

Mike Penning (Conservative, Hemel Hempstead)

I think that everybody in the Committee is moved by the personal circumstances of the individuals who are suffering from this terrible disease and their loved ones and dependants. The point that I think my hon. and learned Friend the Member for Sleaford and North Hykeham was trying to make is twofold. Would we accept the costs being moved on to the business community if we went over the 3% threshold, or do the insurers walk away and we start this process all over again, with nobody getting anything, which is the position that we are in at the moment? I am desperate, as is the shadow Minister and, I think, everybody in this room, to do the best that we can, but this is the deal that is on the table. I know that this is a very long intervention and I apologise, but this is hugely important. It is not a case of us going in and bullying and saying, “You will do this.” They will walk away, and we will start all over again, which is why the previous Ministers had so much trouble over this and why the negotiations took so long. So although I fully understand how emotive this subject is, it is very important that the Committee understands how difficult—

Philip Davies (Conservative, Shipley)

Order. I urge hon. Members to make briefer interventions.

Ian Lavery (Labour, Wansbeck)

I thank the Minister for the intervention and I fully understand it, but it does not make the situation any better that insurance companies are dictating to the Government—to the negotiating team—saying, “If you don’t accept what we’re giving you, perhaps we’ll walk away.” The Minister was described as—I wrote this down—a “thoroughly decent bloke”. [Interruption.] That is my accent.

Mike Penning (Conservative, Hemel Hempstead)

As a cockney fellow, I know exactly where the hon. Gentleman is coming from on this.

Ian Lavery (Labour, Wansbeck)

The Minister was described as a thoroughly decent bloke, and I have no doubt that he is, but I am trying to put this issue into context. Why should ordinary people who are suffering and dying accept this? There are two views; well, obviously, there might be more than two views on this. The insurance companies—these businesses that are supposed to be feeling the pinch—are, in the main, making fortunes. I understand that the negotiations will be very difficult, because they have come to the table. I would suggest that they have probably been dragged to the table by the Government, and that is good. As I have said all along, I welcome the Bill, with the exception of three or four main points, and the main point concerns these insurance companies. In 2012, Lloyds made a profit of £2.7 billion; between January and June 2012, Royal Sun Alliance made £233 million; and between January and June 2013, Aviva made £605 million. These insurance companies are not hard-up. They have been described many times in my company as graveyard buggies. Hon. Members can take from that what they want, but under these circumstances, they have been to the table and they have made an offering. I do not think that offering is enough, for reasons that I will mention. The insurance companies have had the money. It is not a case of their having to scrap about for the money; they have had the money. They have had the money for the past 30, 40, 50 years. They have invested it, and now we are sitting around saying that they might find it difficult to pay anything above 75% of what people are due.

The regulatory impact assessment estimates that approximately 6,000 mesothelioma sufferers lost around £800 million in compensation due to an untraced insurance deal that was cooked up between the Government and their friends in the insurance industry. When looked at with other asbestos related diseases, it represents somewhere in the region of a £1 billion saving to the insurance companies. Somebody said this was mean-spirited; I think that is more of a Christmas type of word. I would not like to say what I think it was. [Interruption.] I really should not, and would not, because the tenor of the debate today from both sides has been very good and constructive, and I hope that people understand where I am coming from. It is something that I have seen in industry for many years.

In my past life, I have seen people lose their ears and eyes, I have seen somebody have their nose ripped off, I have seen people killed, I have seen people have their arms torn out, their hands ripped off, their fingers taken off, legs and feet amputated, chest disease, vibration white finger—[Interruption.] It is really not something to laugh at. It is probably something that the hon. Member for Spelthorne has not experienced himself because it is called the real world. To laugh at that is not acceptable, I really take exception to that. I expect nothing different from the hon. Gentleman , by the way.

I have seen this happen, and I have seen the way in which families react. I have been the one who has knocked on people’s door when someone has been killed, and I have discussed it with the widows. The most important thing when this sort of thing happens is that they ask whose fault it was: “It wasn’t his fault was it? He wasn’t to blame, was he?” I know it is completely different in terms of the 75% because it is not 75% apportioned liability; I know it is not that. However, if you tell families that they will get only 75% of the compensation due, they will naturally say, “Well, does that mean that he was 25% to blame for what happened to him?” That is something that I would find extremely difficult to explain to people.

I have represented people who have said, “I am not bothered about the compensation as long as I get 100% liability from the employer, because I wasn’t to blame for that”. In essence, there would not be an increase in any common-law damages, but one can usually arrange with the employer to give them 100% without any increase in damages whatever, but it made people feel as though they were being looked after in a proper fashion. Insurance companies are fairly wealthy organisations and will continue to be so. They have had the finances over decades. It is not the case that they have not had the money. They have been given £17 million by the Government for the scheme and I believe that they have also been able to borrow £30 million from the Government to smooth the passage. It is hard to believe that we are saying it is fair and equitable for people to accept 75% of what they are due. The Financial Services Compensation Scheme met claims for injured workers where the employer’s insurers were insolvent. They paid out 90% for asbestos claims. There are other schemes, such as that for coal workers with pneumoconiosis, that pay 100% liabilities.

There are set to be a further 2,500 people dying of this horrible disease over the next year or so. That will probably increase over the following years. I believe that paying people their rightful compensation and having an explanation for individuals and their families are the right things to do. Bringing the insurance companies to the table has been a mammoth task, on which I congratulate successive Governments. We have made huge strides forward. I would like to think that, for the sake of social justice and morality, we should give these people, not more than they deserve, but exactly what they deserve.

Nick Brown (Labour, Newcastle upon Tyne East)

I have two amendments in the group. One makes the case for 100% and the other for 110%. The arguments for the two propositions are not the same, although I have tabled both.

I will begin with the case for 100%, which is based simply on fairness. The not unreasonable argument from victims is that 100% of premiums were paid for the insurance. First, the premiums were demanded, and the people who paid them—the employers—were trying to do the right thing. They believed they were insured against this eventuality. All of us will have heard employers complaining bitterly that others operating were not covered by employers’ liability insurance because they were dodging it. That can make the difference between winning and losing a contract. The cost of insurance comes under the costs of operating the business. The people who have done the right thing have had to pay it at 100%. In the case of social security clawback, the Department is looking at 100%, as I understand it. There is no discount in those circumstances. One of my hon. Friends on the Floor of the House movingly pointed out that the poor victim is 100% dead and pretty quickly. It is a horrible condition, as all hon. Members agree. People in those circumstances deserve our sympathy.

The argument for 75%—an increase on the original 70%—is that the victim should be incentivised to try harder, or at least try their very best, to see if there is not another route available. If there is another route available, whether victims avail themselves of it or not, they will be disqualified under this last resort arrangement.

The second argument is that it is a last resort arrangement, and not a substitute for the proper working of an employers’ liability insurance market. What it boils down to is that the key argument against putting the rate up is the one about affordability. The Minister in his intervention made the point fairly, and I understand the constraints that are upon him. However, it is worth exploring that argument.

To help inform the debate we have the House of Commons Library note, which has a table based on the Department’s figures and on some assumptions. The first assumption is whether we are calculating the scheme over a four-year or a 10-year period. Given the length of time that this issue has been in public life, it is legitimate to ask whether it is reasonable to take the shorter period. I understand why insurers want to, but that is not the same thing as saying that we ought to. If one takes the 10-year, rather than the four-year view, it seems more affordable. I will return to that issue, because there are some important caveats to it.

There are also some important assumptions. The starkest is about the cost of the applicant’s legal fees and who will pay them. My understanding is that the applicant gets the settlement and the legal fees are paid on top, but that it comes out of the total cost of the scheme. The assumption when the table was compiled was of a £2,000 contribution towards legal fees. There is now an assumption of £7,000. I do not feel competent to discuss what the cost of lawyers is or ought to be, but I do not want to be guided by the hon. and learned Member for Sleaford and North Hykeham, because I think that that is beyond what the public purse can reasonably afford for a scheme of this kind.

We hope that the scheme will be relatively straightforward, and will be a simple, last-resort access to justice, but the devil is in the detail. It would be grotesquely unfair if applicants were given the run around when they applied for the scheme about whether there was another route open to them, and whether they had fully explored it. A simple, easily administered scheme with most of the points of contention laid out so there is not a lot of room for argument should not cost a lot of money in legal advice. It should be reasonably dealt with by a flat fee. I am not sure that £2,000 is the right figure, but £7,000 for what is supposed to be an agreed scheme is rather a lot of money. I am not sure the Committee would be advised to accept that it has to be £7,000. Later in the debate we may get an explanation of why it is £7,000 and not a lower figure, but for the Government to ask us take it at face value seems unreasonable.

It seems equally unreasonable to say that if we do not do a deal within the parameters that have been set by the industry, all bets are off. I though the Minister made his point as fairly as anyone in his position could. However, what we are discussing will emerge as an Act of Parliament. To give the obvious example, I have constituents who say they cannot afford the spare bedroom charge, and they are not going to get rehoused in a property in which they could afford to pay it. Nobody consulted them and said, “If you say you can’t afford it and won’t pay it, we won’t require you to do so.” They are required to obey the law. It is the same with insurance companies. Whatever the Act of Parliament says, they have to do. They have to comply with the law. Of course, it is reasonable in a pluralistic, democratic society that there are discussions, but ultimately if the industry wanted to solve this itself with a voluntary agreement it was open for it to do so. It has not been able to do so, for reasons that I understand, so it looks to Parliament. Once Parliament does it, it is the law of the land; it is an Act with which the industry must comply, not the next move in a negotiation.

I have said something about the cost of lawyers. I do not feel in a position to pronounce on that and I think it foolish to do so arbitrarily, but it is clearly an issue, as it affects the calculation in the table that the Library has helpfully produced to guide us. Other assumptions underpin the measures, and I am equally queasy about those. The Department has projections about the number of people who will come forward with mesothelioma in the next few years. The further away that we get from the present day, the more tenuous the projections become.

I think that some of the Department’s assumptions are essentially correct. It assumes that a different type of person will come through with that terrible condition than historically. Members of Parliament who represent heavy-industry communities will be familiar with the fate of those who worked in heavy industry with asbestos and were not protected from breathing it in. We all understand that if one breathes in a fibre that is too large, it does not go in; if one breathes in a fibre that is too small, it goes out again; if one breathes in a fibre that is exactly the right size, it lodges in the lung, it can form a pleural plaque and, for the unfortunate victim, it can go on separately to develop into mesothelioma. Just as with every other risky event in our lives, the more that it happens, the more likely one is to be a victim.

The Department’s assumptions—perhaps not so much about whom as about the total number of victims who come through—will underpin the numbers in this table. The assumption, as I understand it—it may have altered since my time—is that there will be a peak round about now or in a year or so and that the numbers will then come down again. The reason why that is believed is that assumptions are made about the effectiveness of the public protection measures that were put in place, with broad consent across the House, on the recommendations of the Health and Safety Executive and other Government advisers.

If the control measures have been undermined or honoured in the breach, have not been as effective a remedy as we hoped or have failed to protect people in completely different types of work with a risk of exposure, the figures might understate the case. That is an important point, but I can see that it tells more for the Minister’s case than for mine; at least I was kind enough to admit it. My point is that there are uncertainties. Knowing that, we should keep some flexibility.

The period of time that the scheme could cover is also an issue. It is reasonable to argue for the 10-year view rather than the four-year view. That has an effect on the affordability of increasing the compensation.

I think that it is reasonable for people in our position, who are trying to make the legal framework in which the regulations will be made, to ask how robust the figure of 3% is as an industry threshold. I genuinely do not know. In debate, we have taken it as given, but I would like to look underneath the figure. Can the Minister say anything when he responds about the robustness of that 3% and the industry’s inflexibility in his discussions with it?

On that point, if I can have another sentence without detaining the Committee too long, in my dealings with the industry when I was the Minister, I found it reasonable, open to exploring different ways through what we all agreed was a difficult problem and rather more open-minded than one might have thought, although of course always with an eye to the costs. The broader situation is quite a problem for the industry anyway. The premiums have been taken, but one suspects they have not been held in reserve to pay out claims. I think that that is the case right across the piece. So that is the case for raising the threshold from 75% to , ideally, 100% if we take a long-term view, but in-between figures have been suggested. As a former trade union official, I am more than willing to vote on the 80%, the 90% and 100% until we get beaten—if we do.

My second proposition is that the level of compensation should be set at 110%. I tabled the amendment to get it on to the amendment paper before the Thursday deadline—just in case we managed to reach this point in the Bill—before I realised that there had been a debate in the other place along the same lines, although the figure in that debate was 130%. I was intrigued to see that in the House of Lords the case offered for the proposition that the compensation should be more than 100% was the very opposite to the case that I intended to advance here this afternoon. So let me briefly put both points of view.

First, it is unreasonable that it is the victim who should be incentivised to do all the hunting around and to see whether there is a legitimate route that they could follow to get compensation from an insurer, which does, after all, still exist and has an obligation to pay up. Let us remember that people are being expected to do this while they are dying slowly and painfully, because mesothelioma is a wasting condition. The argument in the House of Lords was that it would be more reasonable to incentivise the industry to see whether it was possible to find an insurer that still had the liability to pay out, or to find the policy, or whatever the missing bit of construction is.

It was argued, perfectly reasonably, that the industry collectively has taken the premiums and is probably better placed to do the chasing up. Industry administration arrangements are even more sophisticated now than they were, say, a decade ago, and the industry itself is better placed to do it, so why not incentivise it to do it? Thus the argument. If the compensation it had to pay out was at 100%—if it could find someone that had to pay—that would be better than the 110% that it would have to pay under these arrangements, and it also logically follows that if it could not do it, it would have to accept that it was unreasonable to expect the applicant to do it. The industry would have to accept that it could not be done and therefore it would have to cough up. That is one argument, which is completely reasonable.

My thought was the opposite. I thought it would be a good idea to explore with the industry—I accept that—whether a more generic scheme for the victims of asbestos-induced mesothelioma more generally would be a good way to proceed. The large number of cases, particularly the historical cases, are not so dissimilar; the fundamentals are the same. It is possible to argue about who was the cause, and test cases have been fought right the way up to the House of Lords, but, by and large, if a victim has the condition, they have the condition and there is not a great deal of difference.

I was intrigued by what my right hon. Friend the Member for Wythenshawe and Sale East said this morning about generic predisposition and the research into all that, but it is in its infancy. If the condition is generic, is it not logical that the compensation arrangements should be? That would have the huge advantage of enabling the industry to quantify its losses in a much clearer way than it can now. Drawing on my own experience of such discussions, there was not as much hostility from the industry to such a proposal as one might first have thought.

That argument is the opposite of the argument about incentivising the search for the liable insurer, but both are valid and give food for thought. I do not want to take the Minister beyond the narrow question that is in front of us, because that would be unreasonable, but I want to put in his mind this thought: discussing with the industry how the scheme could be expanded out to an easy, ordinary citizen’s route to a known quantum outcome is a path down which some might wish to travel and so is worth thinking about. Perhaps when all of this is over he can force somebody else to draft me a letter on that point, picking up where I left off some 10 years ago. I at least would be interested.

Paul Goggins (Labour, Wythenshawe and Sale East)

I do not wish to detain the Committee for much longer, but this group of amendments is important and I have a number of points to make. I want to express my personal thanks to my hon. Friend the Member for Wansbeck. He did something this afternoon that was done by the hon. and learned Member for Sleaford and North Hykeham this morning: he made sure that we do not forget the people we are talking about and the suffering they face. When we talk about percentages and decimal points, whether in Committee or in any other debate in the House, I naturally begin to feel rather uncomfortable, as we can begin to forget the human beings who are at the heart of our concerns. My hon. Friend did the Committee a great service by speaking as he did a short time ago.

I want to take up the thread of the remarks of my right hon. Friend the Member for Newcastle upon Tyne East. He made the point clearly and forcefully that the outcome depends entirely on the assumptions we make. He took us through a number of those and I want to reflect on one or two of his remarks and set out some thoughts of my own. First, on legal costs, clearly we need the Minister to explain why we went from costs of £7,000 that the claimants paid themselves in the initial impact assessment to the position in the second impact assessment, in which the costs were reduced to £2,000 but would be paid by the scheme, to the situation now in which the estimated costs have gone back up to £7,000. If the assessments are based on expert advice we need some persuading about the experts involved, given that their views can change so dramatically and so quickly.

Amendment 20, tabled by the hon. and learned Member for Sleaford and North Hykeham, brings that particular assumption into focus. If we assume higher legal costs, under his amendment, which proposes payouts at the 80% level, we would have a level of 3.18% of gross written premium, but with lower legal costs that comes out at 2.98% of gross written premium. The assumptions make all the difference in the world when it comes to meeting the cost requirement of 3% of gross written premium—I know the hon. and learned Gentleman is keen to support the Minister on that requirement. The assumption about legal costs is crucial to the hon. and learned Gentleman’s amendment and so we need a persuasive answer from the Minister about that assumption.

My second point has been made very effectively by my right hon. Friend the Member for Newcastle upon Tyne East and my hon. Friend the Member for Stretford and Urmston—although it seems like some time ago now that she made this point. It is whether we should look at the first four years of the scheme or the first 10 years. Looking at the table of figures that has been provided, if we assume both lower legal costs and a 10-year time frame, every single level of payment, right up to and including 100%, falls below the ceiling of 3% of gross written premium that the Minister says we have to adhere to; for payouts at 100% the level of gross written premium is 2.99%. The assumptions that are made are essential to the outcomes. My hon. Friend also made the point that with higher legal costs, payouts of up to 90% still leave us with a level of gross written premium that is under 3%. There are a tremendous number of variables so we have to get the assumptions right.

The smoothing gift, again, makes a huge difference to whether different levels of payout go over or under the 3% limit. If we discount the £17 million, even with the higher legal fees we come in at less than 3%. Again, my hon. Friend the Member for Wansbeck made the point that we are reflecting on and debating all these marginal differences in relation to an industry that, by any measure, is making handsome profits. I take on board what my right hon. Friend the Member for Newcastle upon Tyne East said before—that he always found people in that industry reasonable and decent with—and let us hope that that remains the case. I firmly believe that that is the case, and we should be able to make some progress.

In my view, it should be possible for the Minister to go away again, to talk to these insurance companies and to get a substantial uplift in terms of what can be paid out as a percentage. If it has to be lower than 100%—morally, there is no argument for it being less than 100%, and everybody who has spoken has made that point—and if we have to remain with this 3% figure, it is possible to go away, to look again at those assumptions, and still go in under 3% and have a substantial uplift in what is being offered at the moment.

The Minister needs to do a really good job to explain these assumptions and I hope that, if he is not persuasive in doing so, he will be prepared to go away and have some further discussions with the industry.

Mike Penning (Conservative, Hemel Hempstead)

We have had a really good debate around this group of amendments. Some of the commentary has been excellent, and as we look back on this debate the discussion on this particular area will be seen as quite a defining moment.

In a very long intervention—I apologise for that, Mr Davies—I tried to set out, probably in layman’s terms, that as a Minister I feel a little bit between a rock and a hard place, because from an emotive point of view I could not agree more with lots of the commentary that has been made about what the compensation should be, and because these people are victims. It is not their fault that often they cannot find their employer or the insurer. However, I am where I am and perhaps I could try to deal with some of the issues that have been raised.

Initially, I will speak about the legal fees. Before we went to the other place, £7,000 was where we were, and then it was dropped before we went to the other place, for the specific reason that my hon. and learned Friend the Member for Sleaford and North Hykeham alluded to—that we did not want this to be, if you wish, a big payday for the insurance industry. There needs to be a very simple set of policies and a very simple way of going to a fund of last resort.

However, in the other place—anybody who looks at the Hansard from the other place will see this—we were extensively questioned and pushed to say that the figure of £7,000 was too low, and that there would be an erosion of the compensation that people would be given from the fund. So we came away from the Lords and went to seek advice from the experts, for instance the Forum of Insurance Lawyers, and we said, “What do you think the natural costs would be?” There were others we went to, such as the Association of Personal Injury Lawyers. Of course, we have issued the commentary—the figure was between £3,000 and £7,000, and then between £5,000 and £7,000. The point that I would like to make is that of course we do not want it be anywhere near as high as that, because the individuals will be able to keep the difference and it is not part of the clawback side of the fund, either. If, for instance, they are receiving benefits, this is their money.

I do want to go and see the relevant legal representative bodies. I would like to go with not only my own legal team but perhaps with my hon. and learned Friend the Member for Sleaford and North Hykeham, if he can spare some time to come and negotiate on behalf of the Committee, perhaps. Of course, if that is not possible, perhaps we could push him for some more advice.

I think that we could negotiate a position where the perception is that people who have been given help from the fund are not then being ripped off, which I think is what we were talking about. That is really important. We have seen cases before—I think some cases were alluded to by hon. Members during the debate this afternoon—where people have been ripped off, and that is something that we desperately do not want to happen.

The figure of £7,000 is in the upper echelons of the figures that were given to us on advice. We gave it as a fixed figure so that there was an opportunity for individuals to choose who they went with. It was not going to be part of the compensation scheme. That was not the individual part, but part of the 3%—that is where we are. I give an undertaking to the Committee that I will go off and negotiate with the relevant lawyers’ groups—possibly with the help of my hon. and learned Friend—so that we can get a definitive cost, I hope. It should not be hugely expensive, and if lawyers decide that they want to rip off individuals, we will also ensure that we name and shame them—not that that will make an awful lot of difference in many cases.

Another undertaking I want to give to the Committee is about how the funding and the help is tracked. It is important for Parliament to understand how the funding is working, and I can assure the Committee that the Treasury also wants to know, because it has put a substantial amount of money in and will want to ensure that that is not only being spent correctly, but doing what is said on the tin and getting through. The hon. Member for Stretford and Urmston wants something in the Bill, but I will try to find a mechanism instead. I will come back to the issue. If I can get this into regulations, I will do so, but I hope to be able to use a parliamentary or Treasury mechanism of some description, so that Parliament is formally informed every year, especially as we come through the four-year smoothing period.

Many Members have commented that we are discussing a 10-year plan, but that the situation will almost certainly go on longer. That is absolutely true. We have made many assumptions, which has to be done, based on the evidence that we are given, but as there is a narrowing of the numbers of individuals from the heavy industries, as discussed, there will be other claims coming through where it will be quite difficult. One area that I have been looking at in particular is that of the self-employed. A self-employed plumber or electrician, as mentioned, might have been doing drilling, putting in adaptations, modernising or putting in new boilers. A lot of boilers used to have asbestos around them, in particular in council properties in the early days—ours did, when I lived in a council property. We need to ensure that we get and trace the insurers in the self-employed area as well.

Kate Green (Labour, Stretford and Urmston)

I am interested in what the Minister says about the self-employed. My understanding is that the scheme would not apply to them, so increasing numbers of them becoming victims of mesothelioma would have no bearing on the cost of the scheme. If I am wrong, I would be delighted to hear that.

Mike Penning (Conservative, Hemel Hempstead)

No. I probably used the wrong terminology—again, I apologise. As I understand it, the liability for a subcontractor with a company sits with the company. If I am wrong, I will write to the hon. Lady. That is, though, an important area. I used to be self-employed in the construction industry and I had to be covered by public and employers’ liability insurance, in particular for if I made a mistake on site. I was in that scheme. Self-employment is crucial.

The most important thing is, where is this set? The figures that we have supplied to the House authorities and to colleagues on our assumptions sits at 75%, including the £7,000—it would be at 2.99%. I will make three points, two of which I have made already, so I will concentrate on the third. An agreement was struck with Lord McKenzie in the other House and, whether we think that it was an easy deal or a hard deal—Lord Freud and others thought it a really difficult set of negotiations, even when we moved from the 70% to 75%—this is where we are. I desperately do not want to pass on more costs to business and, if we look at this, as I alluded to earlier, it is similar to the way in which the Motor Insurers’ Bureau works, which is a direct cost that is put on to premiums. We do not want to do that, and I think that everyone accepts that that should not be on new business.

We are conscious that we have a deal on the table, so then of course there is the issue of ping-pong. Although I am certain that there will be some degree of agreement in the Lords—I am not certain, but there is the possibility—if we send the Bill back to the other place, we have to find a slot, we have to get it through, we have to get it back and then we have to do it. Without any shadow of a doubt, that will delay implementation or compensation coming through from the fund for July of this year, and it will delay the regulations.

I fully understand the passions and everything, but I hope that the Committee understands the arrangement. Is it perfect? No, but it is the best deal on the table for people who have absolutely no compensation whatever and no other recourse to get money for their family and loved ones. I will oppose right hon. and hon. Members if they try to raise the figure above 75%. The big “but,” and I have spoken privately to the shadow Minister about this, is that the 3% is not going anywhere. The figure will be 3%, which is important. I hope that hon. Members have listened and understand my position and the Government’s position and will therefore not press their amendments.

Kate Green (Labour, Stretford and Urmston)

I am grateful to the Minister for responding to the points raised in what I agree has been a very good debate. I am particularly struck by the remarks of my hon. Friend the Member for Wansbeck, who said that we should remember not only that the victims are the heart of what we are discussing this afternoon but that they may feel a sense of responsibility for their own fate if they receive less than 100% of the payment. In no way can it be right that, in addition to the physical distress and pain that they are suffering as they face a truly horrible death, they should be made to feel that, in some way, it is their own fault for being in that situation. That makes the moral case for 100% payouts more powerfully than any arguments about discrimination between those who can and those who cannot find their employer’s insurers, important though those points are.

It is absolutely right that my right hon. and hon. Friends have tabled amendments suggesting that the level of payments should be 100%. If we accept the many assumptions underpinning the figures presented to the Committee by the Minister in the impact assessment, 100% payments would breach the 3% of gross written premiums that the industry has said it would consider to be readily affordable. I take issue with what the impact of breaching that 3% figure would be. Although I am not suggesting that we can be certain about what will transpire, it is worth noting that it has been suggested in this debate that passing the costs on to other businesses through higher employers’ liability premiums would ultimately have a damaging effect on employment levels across the sector because of the higher costs.

The impact assessment takes a rather different view of the possible consequences:

“It is worth noting that even if insurers did pass the costs onto employers the actual impact on employer customers is likely to be…low.”

In other words, there seems to be scope at least to consider that, although 3% might be a convenient figure for the industry, it is not an absolutely set-in-stone indication of the point at which a scheme would become unaffordable, either directly for the insurance industry or indirectly through employers’ liability premiums.

The Minister spoke about the assessment of the legal costs, and his answer is helpful in explaining the history of how we have gone from £7,000 to £2,000 and back to £7,000 again. I particularly welcome his clarification that beneficiaries will receive the costs in addition to a payment under the scheme, not as part of their payment. Also, I understood him to have said that beneficiaries will receive the full £7,000, irrespective of the actual legal costs. In other words, any beneficiary under the scheme will receive the payment plus £7,000, which is certainly welcome, but it means that the victim is still paying one way or another. Either they receive a lower level of compensation plus £7,000, or their legal costs could eat into their level of compensation. It seems that it is not really the case that the victim will not ultimately be paying, because they will be paying one way or another.

I was struck by the argument of my right hon. Friend the Member for Newcastle upon Tyne East about the force of legislation passed by this Parliament. It is certainly my understanding that it would not be up to the insurance industry to walk away from what it appears to regard as a negotiated deal when it becomes a matter that has the force of law. I would be surprised were the industry, which, to some degree, has been reasonable and willing to find a good solution, to walk away. From my discussions with the Association of British Insurers, I have picked up a real sense that the industry is determined that a scheme should be put in place quickly. We should therefore not assume that there is no room for further negotiation around what are potentially quite marginal changes over the coming period.

I am also a little surprised that the Minister perceived a real risk of significant delay in getting the legislation on to the statute book. I note in passing that this legislation left the House of Lords in July. There have been several suitable slots in the Commons timetable since we started sitting again in the autumn, and it might have been possible to bring the Bill’s Committee stage forward. I am not aware of an extensive amount of work being done after the Bill left the House of Lords that would have significantly delayed it. Be that as it may, we are now considering the Bill in the last few days before Christmas, and I am pleased that we are doing so, but I would not have thought that a great deal of parliamentary time was necessary. We are not discussing an extensive number of amendments, and I suspect there will be strong agreement from their lordships regarding this afternoon’s amendments.

On amendment 7, I am not persuaded that there is no room for manoeuvre and that we could not have a more generous level of payment under the scheme. It is my intention, therefore, to divide the Committee. I welcome, however, what the Minister said about looking for a suitable mechanism to ensure an annual opportunity for Parliament to consider the level of average civil compensation and the implications for the scheme, so I will not press amendment 9.

Kate Green (Labour, Stretford and Urmston)

I beg to move amendment 8, in clause 4, page 3, line 4, 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’.

Philip Davies (Conservative, Shipley)

With this it will be convenient to discuss new clause 4—Annual report to Parliament—

‘(1) The Secretary of State shall prepare and lay before Parliament an annual report on the scheme.

(2) The report to which reference is made in subsection (1) shall include, in particular, an assessment of the extent to which the scheme has caused or contributed to any rise in premiums payable for employers’ liability insurance.’.

Kate Green (Labour, Stretford and Urmston)

We may be able to make some progress on this amendment because the Minister offered, in passing during our earlier debate, some of the assurance that I seek. The purpose of the amendment is to ensure that the levy remains at not less than 3% of gross written premium, and the industry seems happy and confident that it can afford that.

During the first four years of the scheme, the insurers will meet the cost of payments and thereafter the Department for Work and Pensions will have to estimate the annual cost and levy the insurers on the basis of the estimate. If there is a shortfall, DWP will have to put in more funds, but if there is a surplus it will go into the Consolidated Fund. The Minister’s indication that there would be annual reviews of the payment level was welcome, and there will be opportunities to keep a close watch on how it stacks up against the levy.

According to the impact assessment, after the first four years, the cost of fulfilling claims will fall dramatically because of the expected spike in the early years as cases that have been waiting in the wings are gathered up following the cut-off date, which is currently 25 July 2012.

The amendment stipulates that, although the cost of fulfilling claims will fall and may continue to fall for many years, the levy would remain at 3% regardless of the claim bill, and that any surplus money could be invested in research, scheme extension or greater pay-outs. That would prevent victims from being short-changed when insurers could pay more within their own terms of what is affordable, and would meet the concern that, if average civil compensation claim amounts fall in future, the industry’s obligations and payments to sufferers under the scheme would be protected. Such an approach could be more generous than a guaranteed payment of, for example, 80% but offers less certainty as it would depend on how much of the levy is used to meet payments under the scheme.

Given the significant variations that we have been told about in recent months in the projected costs of the scheme, which are highlighted in the discrepancies between the impact assessment figures that we had in July and November, this may be the only way to underwrite the best possible deal for mesothelioma victims. As was made clear in an earlier debate this afternoon, the insurance industry seems to have indicated that a 3% levy is affordable for a much longer period than the four years that the Government have defined as critical. The ABI’s briefing states:

“To put this new body”—

the body that will make payments to sufferers who are unable to trace their employer or insurer—

“on a stable footing, we are proposing that these payments be funded by a levy of around”

£30 million to £35 million

“per year on insurers who currently offer employers’ liability insurance. We expect the scheme to run for around 40 years, until mesothelioma cases no longer arise”.

Nowhere in that ABI briefing is it said that the £30 million to £35 million will be time limited or that insurers can afford it only in the first four years or the first 10 years of the scheme. Indeed, the implication is that the industry seems to be prepared for the possibility of making the contribution over the full 40 years of the scheme’s envisaged lifetime, totalling £l.2 billion to £1.4 billion.

In our view, that is likely to be enough to provide payments equivalent to 100% of average civil compensation claims and to open the scheme to all mesothelioma sufferers going back to 1968, which it has been estimated would cost £1.1 billion. Any additional money left in the consolidated fund would then be available to pay for future expansion of the scheme. It could be used for research, as we discussed this morning, and of course, as a matter of priority, to increase payments up to at least 100% or perhaps more if we felt that that would impose a useful discipline on the insurance industry.

I understand from what the Minister said a few moments ago and when we spoke privately earlier that it is absolutely the Government’s intention that the 3% of gross written premium will be protected and that the Government do not expect it to be renegotiated downwards in the light of the level of claims and payments made. It would be welcome to have that assurance on the record. The figure is the bottom line—a backstop—to ensure that the scheme is never less generous than it could be, but the Opposition will continue to argue that there is already scope for it to be more generous than is currently proposed.

The amendment is important in setting the bottom line that the scheme will not, now or in future, be allowed to slip below. It would be welcome if the Minister put that specific assurance on the record in Committee this afternoon. If he is able to do so, and I hope he is, I will accept his assurance.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I rise to speak about new clause 4, which has been grouped with the amendment tabled by the hon. Member for Stretford and Urmston. I do not intend to press the new clause when we come to deal with it on the final day of our proceedings, but I want to raise the issue that it encompasses with the Minister at this stage, because this is the stage when it is to be debated. The issue relates to the premiums charged for liability insurance to employers.

In the previous debate, the hon. Lady drew attention to what the impact assessment said about whether the costs of the scheme would be passed on by the insurance industry to employers. She suggested that the costs were not significant, and I respectfully suggest that she is wrong about that. In fact, in the passages subsequent to those she quoted, in paragraphs 97 and 98, the assessment of the economists who prepared the assessment is that passing the costs on to employers will lead to increases in premiums of something in the order of 2.24%. Every cost that businesses have to pay, including something that might be regarded as modest—even 2.24%—represents funds that businesses cannot use to grow, employ people and so on. If we add 2% here, 2% there and 2% or 5% in other places, those costs are detrimental to British business in the global economy in which we are now trying to compete.

The point raised by new clause 4 is that the last thing one wants to come out of the negotiations between the insurance industry and the Government, with the industry itself swallowing anything that falls within 3% of gross written premium, is premiums creeping up by the back door, whether now or during the life of the scheme, which, as the hon. Lady mentioned, might be as much as 40 years. It is for that reason that the new clause, which I tabled—as I indicated, I will not seek to press it—seeks an annual report, focusing in particular on the impact on premiums to employers of the scheme and its administration over the course of its life to be laid before Parliament annually.

From the Minister, I want not only to hear warm words that his Department, and no doubt the Treasury, will keep an eye on the cost of the scheme and the costs incurred by the insurance industry and ensure that, in accordance with the undertakings given, they are passed on to employers by the insurance industry. I also want some indication as to how that will be done, so that those costs, which the insurance industry said it will bear—perfectly properly and in a commendable fashion—will not now, or at any stage in the lifetime of the scheme, be passed on to employers. That is what the new clause would achieve, should someone else on the Committee press it successfully, and I urge the Minister to give some assurances on that point.

Nick Brown (Labour, Newcastle upon Tyne East)

I would like to treat the Committee to a few words of support in respect of the hon. and learned Gentleman’s suggestion in new clause 4. I understand the spirit in which he tabled it and why he wants to hear from the Minister on the specific issue to which it relates.

The hon. and learned Gentleman raises a specific and important topic. The significance of employers’ liability insurance, as opposed to other forms of insurance, is that it is a statutory requirement. I am sure that we have all heard from our constituents the allegation that, because it is a statutory requirement and the insurance industry knows that, those in that industry collective price up, rather than compete with each other to arrive at a market-driven price. I have no way of knowing whether that is correct.

Stephen Phillips rose—

Nick Brown (Labour, Newcastle upon Tyne East)

The hon. and learned Gentleman kindly offers to intervene.

Stephen Phillips (Conservative, Sleaford and North Hykeham)

I would have had no idea either, but if the right hon. Gentleman looks at the impact assessment, he will see that that question is answered. Certainly, all the evidence given to those who prepared the impact assessment showed that the marked is highly competitive and that even if the industry has to swallow these costs in the absence of the agreement with the Government, it would be likely not to push up premiums to pay for the scheme. That is an argument that we could have deployed—I do not think that any of us did—in relation to the previous debate.

Nick Brown (Labour, Newcastle upon Tyne East)

I wish I had known that when we discussed the previous group of amendments—it is new to me. Since we are exchanging information, I may say that when we were in government and I was the Minister, the opposite point of view was put to me forcefully by those who explained to me how the market was working. The suggestion of keeping a regular eye on how employers’ liability insurance is working, the underlying pressures affecting it, and in particular whether anything in this scheme is driving up the costs, is a good one.

I suspect that costs would not be driven up, because of the scale of the thing, but we all stand to be proven wrong in our assumptions—and they can be no more than that. The new clause strikes me as good, but the objectives could be equally well served by the Minister keeping the matter under review and offering to report on a regular basis on these issues in a way that is consistent with the advice available to him.

Mike Penning (Conservative, Hemel Hempstead)

I welcome the way in which the amendment and new clause 4 have been discussed.

I almost pre-empted myself in my previous comments. It is very important that the insurance companies know that the 3% is there. In Committee in the other place, Lord committed to a review at the end of the smoothing period, after four years, to see exactly things were going. There was certainly not a commitment to interfere. I will place that fact in regulations so that the Committee has confidence that a review will take place after the four-year smoothing period. At that point, we will have a much better idea of how much the levy collector is collecting. We may be able to spend that by increasing the percentage, or we may be able to do other things with it.

In the meantime, it is important to know that the charge will not be passed on to new British businesses, because it has nothing to do with new businesses that take out compulsory insurance. We are working with Her Majesty’s Treasury, the Financial Conduct Authority and the levy collector. My view is that the levy collector should be able to produce a report, because they will fully understand the business and how it is moving. There is more work to be done, with BIS in particular, but I think that the levy collector will be placed to report on a regular basis, at least annually.

With that in mind, I hope that amendment 8 will be withdrawn, because I think have provided the back-stop that the hon. Member for Stretford and Urmston has referred to, and that I have also satisfied the requirements of new clause 4.

Kate Green (Labour, Stretford and Urmston)

I listened with interest to the debate on new clause 4, in which a number of slightly contradictory points were made. We were told that the impact of the additional cost on businesses would be, to quote the impact assessment, “low”. That was not my assertion; it is the Government’s assessment. The hon. and learned Member for Sleaford and North Hykeham was concerned that premiums would be passed on to business customers, which would have a negative impact on businesses’ profitability, growth prospects and opportunities to create jobs. Having said that, he helpfully noted that the employers’ liability market is extremely competitive, which might be expected to keep premiums down. As my right hon. Friend the Member for Newcastle upon Tyne East has said, it is a pity that we did not think to apply that argument in the earlier debate. I must confess that I was aware of the comment in the impact assessment, but I did not think to apply that argument.

The industry cannot expect to have its cake and eat it in every possible way. If 3% of the gross written premium is, as the Minister has said, the very least that we can expect to see from the industry, that is a welcome back-stop. I think I understood him to say that the 3% will stick and that there is no intention to reduce it or water it down, but that it is less clear what might be done with any surplus, and that might be reviewed. If more than the envisaged 3% is collected from the industry, the scheme, as currently designed, will pay out to victims.

In the meantime, we look forward to discussing with the Minister in the years to come—I am sure that he is looking forward to the promotion that we all hope he will receive—or with his successors what might be done with surplus funds collected from a levy set at 3% of the gross written premium. On the basis of the assurances that he has given, I beg to ask leave to withdraw the amendment.