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Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2009

My Lords, I start with the formalities. It is a requirement that I confirm to the House that these provisions are compatible with the European Convention on Human Rights and I am happy to do so. The regulations are being made under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and their purpose is to increase the amounts of compensation paid under the Act by 5 per cent to those who first satisfy all the conditions of entitlement on or after 1 April 2009. I am very pleased to introduce the regulations on behalf of the Government. This compensation scheme stands apart from social security benefits and, as a result, the amounts paid are not increased as part of the overall uprating of benefit rates. In the first 25 years of the scheme’s operation, this meant that the amounts to be paid were not increased on a routine, annual basis. However, following the transfer of responsibility for this work to the Department for Work and Pensions, a commitment was made to increase the rates of payment annually. I am very happy again to honour that commitment. It is important that we continue to do so in the future. This scheme fulfils an important role in providing compensation where no civil action can be taken against an employer or the person responsible for the exposure to one of the listed agents. Anyone suffering from a dust-related disease as a result of their work can sue their employer. However, the diseases covered by this Act, and asbestos-related diseases in particular, can take a long time to develop; it may be as long as 40 years or more after exposure to the dust. That means that by the time the illness is diagnosed the employer or employers responsible may no longer be trading. In those cases, there is no opportunity for a sufferer or their dependants to sue for compensation. Improved health and safety procedures have both restricted the use of asbestos and provided a safer environment for its handling. However, we cannot turn back the clock and solve the problems created by the widespread use of asbestos before its effects on people’s health were fully understood. We are now facing the consequences of that common usage. Although we cannot remedy all the problems, we can at the very least ensure that financial compensation is available. This scheme was introduced to meet that purpose and I am pleased that it has done it successfully. The Act provides for a single lump-sum payment to be made to a sufferer. This lump sum is in addition to any award of industrial injuries disablement benefit. Together the payments constitute a significant financial package. Under this scheme, the maximum amount that can be paid from April 2009 is just over £74,000 for a person aged 37 or under at diagnosis, although the average payments are much lower; the highest amounts are paid for those diagnosed at an early age. In addition, a person diagnosed with mesothelioma is automatically assessed as 100 per cent disabled for the purposes of industrial injuries benefit and, from April 2009, will be paid £143.60 a week. There are three conditions to be satisfied before any payment can be made. First, the sufferer must be entitled to industrial injuries disablement benefit. Secondly, there must be no relevant employer who can be sued. Thirdly, no court action can have been brought, nor any compensation received, in respect of the disease now being claimed under the Act. The Act covers five respiratory diseases, most of which are directly related to asbestos exposure. These are mesothelioma, pneumoconiosis, which includes asbestosis, diffuse pleural thickening, primary carcinoma of the lung following exposure to asbestos, and byssinosis. However, mesothelioma is the major reason for a claim. About 80 per cent of claims are being paid because a person is suffering from that disease. Mesothelioma is an extremely severe form of cancer and is invariably terminal within a short timescale. The average life expectancy is only 12 to 18 months from the time that the disease is diagnosed. Since the Act was introduced, payments totalling £256 million have been made, with payments of just under £26 million made in this year alone. I am pleased that this scheme continues to perform an important role in providing compensation. Sadly, the number of people being affected by asbestos-related diseases continues to rise. In 1968, only 153 people died from mesothelioma. In contrast, in 2006, there were just over 2,000 deaths. It is estimated that the number of deaths is expected to peak sometime between 2011 and 2015. It is now the most common cause of work-related death. This scheme continues to be very successful but some people suffering from mesothelioma are not entitled to any payment under the 1979 Act because they were not exposed to asbestos in the workplace. This was recognised as a weakness in the provision of compensation. I am pleased to note that new legislation, taking effect last October, has remedied the matter. For the first time, from 1 October 2008, compensation has been provided to people suffering from mesothelioma whose exposure did not occur at work or where the source of the exposure cannot be identified. This scheme largely mirrors the provisions of the 1979 Act in providing a single lump-sum payment and should ensure that everybody suffering from mesothelioma is paid compensation, either from the Government or through the courts. My officials estimated that in the first year of the new scheme we would expect about 1,200 claims, with about 600 a year after that, the higher numbers in the first year resulting from the number of people who were already suffering from the disease when the new scheme was introduced. The number of claims in the first four months is slightly lower than we expected, at just under 300. In total, compensation of approximately £4 million has been paid. I am certain that we all agree that no amount of money will ever compensate these sufferers or their families. However, these regulations help to ensure that the compensation provided for in the original Act maintains its value. I commend the uprating of the payment scales to noble Lords and ask their approval to implement them.