SNP and Westminster clash over asbestos bill

Published on Saturday 8 November 2008 19:16

SCOTTISH ministers are at loggerheads with Westminster over fears that SNP legislation to compensate workers exposed to asbestos could cut Scotland's budget by tens of millions of pounds.

The Nationalists' flagship Damages Bill has been introduced to overturn last year's House of Lords ruling that people with 'pleural plaques' – a thickening of lung tissue caused by exposure to asbestos fibres – should no longer be able to claim compensation.

The bill, which would put Scotland at odds with the rest of the UK by compensating those with the plaques north of the border, has been championed by Kenny MacAskill, the Justice Minister.

The Lords decided against paying damages to such individuals because the plaques are not in themselves harmful and cause no physical symptoms.

Medical experts agree that although they are a 'marker' of asbestos exposure, plaques do not necessarily mutate into lethal forms of asbestosis, such as mesothelioma, which still merit damages.

MacAskill was supported by MSPs of all parties as well as campaign group Clydeside Action on Asbestos and Thompsons Solicitors, which handles 90% of asbestos claims in Scotland.

The Scottish Government has said that the potential cost to businesses, insurers, Government departments and local authorities will be 6.5m a year.

Others estimate the cost could run into tens of millions once the floodgates open, with the Association of British Insurers claiming the annual cost could be as much as 607m.

Holyrood's Justice Committee has raised concerns that the legislation will invoke a Treasury mechanism known as the Statement of Funding Policy, which states that if a decision of a devolved administration has financial implications for the UK Government, the devolved administration will meet that cost.

Bill Aitken, the Justice Committee's convener, said: "What this financial regulation states is that if Scotland extends liability then Scotland pays for it. Scotland will either pay for it directly or they will simply cut the (Barnett formula] grant."

Malcolm Tarling, of the Association of British Insurers, said a Barnett formula cut was just "one of the potential unintended consequences", adding: "It will push up insurance costs and impact on every business in Scotland."

Bridget Prentice, the UK Justice Minister, has written to the SNP's Community Safety Minister, saying a decision on the Statement of Funding Policy will not be reached until the bill's terms have been finalised by the Scottish Parliament.