Mike Penning leads the Mesothelioma Bill through its Second Reading in the House of Commons, which will provide financial assistance to sufferers of cancer of the mesothelium which is commonly linked to exposure to asbestos.

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The Minister of State, Department for Work and Pensions (Mike Penning): I beg to move, That the Bill be now read a Second time.

Before I start my speech on Second Reading, let me, too, pay tribute to the firefighters and professional emergency services in Glasgow. As a former firefighter, I know the training that those in the emergency services go through, but nothing prepares anyone for the scenes they will have encountered when they arrived. I have had a huge and devastating disaster in my constituency, at Buncefield, and the fact that the public went in rather than walking away proves what a great nation we all live in today.

As I am a Minister of the Crown and an MP who is dyslexic, it was an interesting experience to be given the Mesothelioma Bill. It is an honour and a privilege, however, and I hope that colleagues will bear with me if I occasionally get the word “mesothelioma” wrong.

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. However, many sufferers of diffuse mesothelioma, the aggressive cancer caused by exposure to asbestos, are unable to find an employer or relevant insurer to claim compensation from. They developed a fatal disease through the fault of their employer yet they are still unable to seek compensation through the civil courts because the responsible employer no longer exists or the records are insufficient to show who the insurer might have been.

My brief states that the “previous Administration” made some noise about this issue over the years, but in fact previous Administrations have done so—yet there is still no provision on the statute book. I am confident, however, that we can get these measures on the statute book as soon as possible and I shall explain why in my speech.

John Healey (Wentworth and Dearne) (Lab): I am grateful to the Minister for giving way. I am pleased to see this Bill, only three years after the Labour consultation, and I am particularly pleased that the Minister is in charge of its progress through this House. Will he admit that this is not the scheme that Labour published in February 2010, that almost all the concessions the industry sought during the consultation have been conceded by the Government and that this is a now a scheme that shows that the Government have not stood up to the interests of the big insurance companies?

Mike Penning: No, no and no. The previous Administration undertook their consultation just before the general election. I will not get into party politics, but as the former Minister started on the subject, I will continue on it. After 13 years, suddenly there was a consultation, which was very wide ranging and did not develop the scheme. I cannot find out exactly what the previous Government wanted to do, because under the rules I am not allowed to see that, but all the indications are that what they would have proposed would not have passed into statute without huge cost to the taxpayer, or to people being insured today. None of that cost is incurred under the Bill.

The Bill is part of the ongoing commitment by the Government and the insurance industry to correct the market failure that everyone accepts there has been in respect of mesothelioma cases. It tackles the problem in two ways: first, by providing a power to set up a payment scheme and, secondly, by providing the possibility of establishing a technical committee that will, where there are disputes, make decisions that are binding on the insurance industry.

Diffuse mesothelioma is a fatal disease caused exclusively—this is crucial to the Bill—by exposure to asbestos. It has a long latency period, often of between 40 and 50 years, but after diagnosis average life expectancy is, sadly, only eight to nine months, with very few exceptions living beyond that. The long delay between exposure and developing the disease, combined with inconsistent record keeping in the insurance industry, means that too often people struggle to trace an employer—the employer may no longer exist—or the insurer who provided the employer’s public liability insurance, against which they can make a claim for civil damages. The insurance industry and the Government recognise that this is unjust, and that a provision must be brought forward in the Bill.

The obvious question is: why is legislation being introduced? Despite recognition of the failure of the market, the insurance industry has not been able to put forward a scheme of its own that would compensate those concerned. Disputes between insurers, and the different interests of companies that still offer employers’ liability cover, or active insurers, and those no longer offering cover, or run-off insurers, have prevented the industry from agreeing a voluntary levy; I think that was looked at in the consultation.

Mr Kevan Jones (North Durham) (Lab) rose—

Mike Penning: I want to make progress. I am very conscious of the time, so I will not take an awful lot of interventions. Colleagues will have the opportunity to speak, either later on Second Reading or in the later stages of the Bill.

Industry representatives asked for legislation imposing a levy to support the payment scheme. The Bill establishes a payment scheme that will make substantial lump-sum payments to eligible sufferers from mesothelioma—and, crucially, eligible dependants of sufferers. The scheme will be funded through a levy on insurers active in the employers’ liability market, meaning that the active employers’ liability insurance market will bear the cost of the scheme.

Mr Jones: I am grateful to the hon. Gentleman for giving way. I know that the insurance companies are trying to sell this as a generous scheme, but all estimates say that it will be worth about £350 million. Last year alone, the profits of Lloyd’s of London were £2.7 billion. Does he not think that, from that perspective, the insurance companies are getting away very cheaply?

Mike Penning: Nothing is perfect, but there was nothing there before, and if we had carried on the way we were going, nothing would be there, going forward, for people who are suffering so much, and who need help today.

[Interruption.]

It is no good the hon. Gentleman chuntering; he has had an opportunity to intervene, and perhaps later he will make a speech. That would be more useful than chuntering. As a friend of mine, he should know better, because I will not respond to that sort of chuntering. It just wastes time in the House.

The scheme is intended to be an alternative to seeking civil damages, which we still want people to do, if the opportunity arises. The driving principle is that where adequate records are not available—this is why the scheme was developed—the disease has been diagnosed, and there has been negligence or a breach of the statutory duty, a person should still be able to access payment for their injury. That is the crucial part of the Bill. Payments should be made, wherever possible, to the sufferers themselves, while they are still alive; I think that everyone would want that, but sadly it has not been happening. The scheme will therefore be straightforward, simple, and quick to process claims.

Sadly, we expect roughly 28,500 deaths from mesothelioma between July 2012 and March 2024, when the scheme is expected to come to its conclusion. We are seeing a peak at the moment.

Mr Nigel Dodds (Belfast North) (DUP): Will the Minister give way?

Mike Penning: I will give way one last time, but then I will have to make some progress.

Mr Dodds: I simply wanted to say, given the Minister’s experience in Northern Ireland—the Bill extends to Northern Ireland and the Assembly has passed a legislative consent motion—that many people there will warmly welcome the fact that legislation is being put in place. I would have liked it to go further, but I commend the Government for bringing it forward.

Mike Penning: I am very pleased that I gave way to the right hon. Gentleman. The legislative consent process has taken place in Northern Ireland and in Scotland, which is important in ensuring that the Bill can go forward.

If the Bill is passed before the end of the year, the first payments could be made by July 2014, which I think is what we all want. Around 300 people a year could receive an average payment of £115,000, less benefit recovery, which will be around £20,000 on average. Timing is key, because the number of mesothelioma cases is expected to peak in 2015. We must act now and launch the scheme as soon as we can, with the regulations made as soon as possible after Christmas. I expect the regulations to be in place by April 2014.

Let us look quickly at the eligibility criteria. First, an individual has to have been diagnosed with the disease on or after 25 July 2012. Secondly, they were employed at the time of exposure to asbestos, and that exposure was due to negligence or breach of statutory duty on the part of the employer. Thirdly, they have not brought a claim for civil damages against an employer or the employer’s insurer. Fourthly, they are unable to do so—this is not a replacement for civil action. Fifthly, they are not already receiving damages or other payments relating to the disease from another source.

Eligible dependants of diffuse mesothelioma sufferers may apply to the scheme in cases where the person with the disease has died before making an application or while the application was being processed. Eligible dependants will receive exactly the same amount of money as the sufferer would have received.

A sufferer must have been diagnosed on or after 25 July 2012 to be eligible for the scheme. There are always difficulties with cut-off dates, but without one the costs would be unlimited. I know that it is unfortunate, but we have to be pragmatic as we move forward. With a cut-off date, we can proceed with the agreements.

John Woodcock (Barrow and Furness) (Lab/Co-op): Will the Minister give way?

Mike Penning: If the hon. Gentleman does not mind, I will make some progress.

The date of 25 July 2012 was when the Government announced that we would be setting up the payments scheme and so created a reasonable expectation that eligible people diagnosed with the disease on or after that date would receive a payment. The Bill does not, and cannot, look to respond to all the people who have been affected by asbestos diseases. The issue of individuals who have developed asbestos-related diseases but cannot trace a third party will have to be addressed outside the Bill. The Bill is not an appropriate instrument—I know that some people think that it is—for taking that forward.

Mesothelioma is a distinctive disease, because it is always fatal and always caused by asbestos. That allows for a straightforward scheme to be put in place as soon as possible. A streamlined scheme, such as the one we have brought forward, could not cover all the other diseases. It would otherwise be very complicated and expensive for the taxpayer.

Mr David Anderson (Blaydon) (Lab): Will the Minister give way?

Mike Penning: If the hon. Gentleman does not mind, I am not going to give way.

The costs of other schemes would be disproportionate and the agreements we have with the insurance companies —I know that some colleagues do not like them—would make that very difficult. We are 100% committed to delivering on the Bill. This measure represents a huge step forward, and it should be recognised as such. I thank the right hon. Member for Belfast North (Mr Dodds), who is no longer in his place, for doing so.

The scheme will make payments to eligible people according to a fixed tariff and according to the age of the person who has the disease. The payment will be based on roughly 75% of the amount of average civil damages. Those who have followed the Bill’s progress through the other House will realise that it raised the figure from 70% to 75%. The figure of 75% is probably is not as important as the 3% levy, which is very important.

Nia Griffith (Llanelli) (Lab) rose—

Mike Penning: I will not give way.

Setting the payments at the right rate is crucial to the success of the Bill and the ultimate establishment of a payment scheme. The payment rate of 75% of average civil damages takes the levy right to limit of what insurers have indicated they could absorb without passing the costs on to new businesses—an absolutely crucial issue. It is the absolute maximum that would be realistic within a fixed-payment scheme.

The levy on insurers will be imposed on active employers’ liability insurers at large today, not the individual insurers who took out the premiums, who were covered in cases that come under the scheme. The scheme could be jeopardised if the levy were set disproportionately high. That could delay the introduction of the scheme, preventing the payment mechanism from being in place at the time of the peak of mesothelioma deaths, which, according to the actuaries, will be around 2015. I am sure we will debate that as we go through the Bill, but I hope that that will not detract from the importance of ensuring that it gets on to the statute book as soon as possible. As everybody in the House will understand, the scheme must strike a careful balance in making a substantial payment to eligible people while ensuring that the contribution made by the insurers is fair and not excessive. Crucially, the proposed levy rate must not be so high as to risk increased costs on business, thereby adversely affecting British businesses, which no one in the House would want.

In addition to the payment scheme and the levy, the Bill makes provision for the possibility—I stress, the possibility—of establishing a technical committee to adjudicate on making binding decisions on disputes between insurers. I think we would all prefer that to these matters being in the courts.

The Bill and the principles behind it merit the support of the whole House.

Gemma Doyle (West Dunbartonshire) (Lab/Co-op): Will the Minister give way?

Mike Penning: I am coming to the end of my comments.

We have no doubt that the principle of the Bill—[Interruption.] It is no good Opposition Front Benchers chuntering; they will have their opportunity to speak in a minute. Let us just get on. If the hon. Member for West Dunbartonshire (Gemma Doyle) wants to speak, as lots of Members do, she will be welcome to do so. That is why I am not giving way every five seconds.

Chris Bryant (Rhondda) (Lab): On a point of order, Madam Deputy Speaker. The Minister is expecting to speak for a second time in this debate, but he is not prepared to give way during his speech now. Can you confirm that it is a matter of discretion for the whole House as to whether somebody is allowed to speak for a second time in a debate?

Madam Deputy Speaker (Dawn Primarolo): If a Minister seeks to speak for a second time, it is with the leave of the House. As the hon. Gentleman knows, whether any Members, including Ministers, decide to give way to an intervention is entirely a matter for them and not for the Chair.

Mike Penning: I am conscious that lots of colleagues want to speak in this debate, which has been shortened because of the two very important statements that took place earlier. I have given way three times and there will be plenty of opportunities for Members to speak. The hon. Member for Rhondda (Chris Bryant) has probably got his press release, yet again, but that is unnecessary in this sort of debate.

I hope that the House will see the urgent need to push this Bill through and get it through its Committee and Report stages so that it goes on to the statute book and I am able to move the regulations that are under consultation as soon as possible. It can then provide compensation for our constituents who have been suffering from this terrible disease or, if they have died, for their dependants who need assistance from the scheme.

5.39 pm

...

And at the conclusion of the debate

Mike Penning: With the leave of the House, I will respond to the debate, which I opened earlier today.

May I say from the outset that my intention was for as many Members as possible to be able to take part in this important debate? Seventeen colleagues, including those on the two Front Benches, have taken part. I could have taken a few more interventions, but if I had taken too many the hon. Members for Poplar and Limehouse (Jim Fitzpatrick) and for West Dunbartonshire (Gemma Doyle) would certainly not have got in. Anyone in the House who knows me will know that that was my intention and that I was not trying to shirk my responsibilities in any way. Perhaps when the hon. Lady has been here a little bit longer, she will know me a bit better.

Interestingly, many Members have said that the Government are in bed with lots of different parties and that perhaps I am anti-trade union. Many Members will know that I am a proud member of the Fire Brigades Union and that I was a member of Unison’s predecessor when I was a lifeguard in Castle Point in Essex after I first left the Army. It is important that we pay tribute to those who have worked so very hard over the years to introduce not just this Bill, but others. I pay tribute to the trade unions for the work they have done over the years and to the victim support groups across the country.

I also want to acknowledge something that my former colleague from the fire service, the hon. Member for Poplar and Limehouse, acknowledged in part, namely that, while this disease has massively affected areas of heavy industry—I understand fully what many Members from the north-east have said—it does not cherry-pick. It is possible for someone to glance past an area with asbestos one day, pick up the disease and not know about it for another 40 years. As has been said, many people who are in work do not know that they have been in contact with asbestos. In some cases, their employers might not even know, especially if they run the emergency services.

I am reminded of my former colleagues in Glasgow and the work they did over the weekend. They would not have thought about whether there was asbestos in there; they would have gone straight in, quite rightly, and dealt with it. What their employers have to do—I completely agree that it is much easier for the public sector to do this than the private sector—is address their own responsibilities. I agree with the hon. Member for North Durham (Mr Jones) that the unions and employees should have a register. Had they had a register, a lot of the issues under discussion would have been addressed a lot earlier.

Mr Anderson: I take exception to the Minister’s comments. Why should it be easier for public sector employers to do this than private sector employers? They knew the dangers, they knew the risks and they were insured. Why should the way they manage this be any different?

Mike Penning: The hon. Gentleman makes an enormously important point. I can remember being in an asbestos suit not long ago, and the hon. Member for Poplar and Limehouse is a little older than me, and was in the fire service before me. So many lessons can be learned, and they need to be learned, because people have the disease and are suffering.

I think almost 100 different questions—some were very technical and nearly all of them were very important—have been asked during the debate, and it would be impossible for me to answer them all in the time I have been given. I will therefore write to hon. Members who have spoken, and for the benefit of those who have not taken part I will put the answers in the Library of the House so that everyone has an opportunity to read them.

I have listened very carefully to the debate, and I have tried not to be party political or partisan in any way, but nobody watching would think that the previous Administration had been in government for 13 years. The issue has been known about for many years and, as I said in my opening speech, Administrations should have dealt with it.

It is worrying that we have been asked why the Government have taken two years to sort out the problem. The consultation was very wide ranging, and no one would have known from it what the previous Government wanted. I cannot find out exactly what they wanted, because we are not allowed to see their papers. The consultation came out in February 2010, just before the general election, after which we had the purdah period, and then we came into office, and without knowing exactly what was intended, my predecessor and the very dedicated Lord Freud, the Minister in the other House, worked with the Secretary of State to bring forward this Bill.

Nothing is perfect, and I fully understand that hon. Members on both sides of the House want to table amendments in Committee and probably on Report. What is very important, however, is that the Bill is passed and regulations are laid, and that compensation gets out to the victims of this terrible disease and their loved ones. If even some points that have been discussed were put in, the Bill would have to go back to the Lords and that would mean a period of ping-pong.[Interruption.] I said some, not all points.

It is absolutely imperative to get the Bill through, or people who have waited for compensation, in some cases for decades, will not get it. If there is ping-pong on the Bill, we will be into the new year—the Leader of the House is sitting next to me—and although I will be as open minded and pragmatic as I can, the Bill needs to be put on the statute book.

Mr Hepburn: What about the 6,000 victims prior to the cut-off date? Why should they be victimised?

Mike Penning: I am good friends with the hon. Gentleman, and I know him well. I do not see it that way, as he knows, but I understand why he does. There has to be an arbitrary cut-off date, and the hon. Member for Hartlepool (Mr Wright) said that the date will be arbitrary whatever we do.

We have 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, otherwise that would have been done under the previous Administration. The Bill is not perfect and it probably can be amended, but it must not be delayed.

Mr Kevan Jones: I am interested that the Minister says there has to be an arbitrary date. No, there does not; there has to be a date that is justifiable, and the only such date is the 1965 date of knowledge.

Mike Penning: That would be an arbitrary date too, because, as the hon. Gentleman said, mesothelioma was known about before 1965. Whatever happens, if we get bogged down in a legal argument, it will delay the Bill, and the compensation that everyone has worked towards for so many years will be massively and dramatically affected.

Chris Bryant: I am sorry to intervene on the Minister, but he seems to be saying that he will not countenance any amendment to the Bill—despite our having had a debate in which everyone who has spoken has said they want amendments—because such amendments would delay the Bill beyond Christmas. With his timetable, however, I cannot see how he can possibly get it out before Christmas anyway.

Mike Penning: That is the second time the hon. Gentleman has talked about my timetable. The Opposition insisted on three days in Committee; we said they could have less.

Chris Bryant indicated dissent.

Mike Penning: If the hon. Gentleman talked to his own Whips, he might get some sense. That is exactly what happened.

At the end of the day, however, some parts of the Bill can be amended without it going back to the Lords. Some parts, particularly on the percentage—[Interruption.] It is for regulations. It is not actually part of the Bill. If the hon. Gentleman reads the Bill, he will understand what is going on. He is trying to score party political points on a really serious issue, and he is wrong. We need to ensure that what can be amended, is amended, but I will not have the Bill, and therefore the compensation, delayed. With that, I hope the House will give the Bill a Second Reading and that the Opposition will vote for it this evening. It is important that we get the Bill through the House.

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