Health and Safety at Work etc. Act 1974 (General Duties of Self-Employed Persons) (Prescribed Undertakings) Regulations 2015

Wednesday 22nd July 2015 Lords Chamber

Motion to Approve

15:16

Moved by

[Baroness Altmann]

That the draft regulations laid before the House on 22 June be approved.

Relevant document: 1st Report from the Joint Committee on Statutory Instruments

[The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)]

Section 1 of the Deregulation Act 2015 gives the Secretary of State the power to make regulations, which limit the scope of Section 3(2) of the Health and Safety at Work etc. Act 1974 so that only those self-employed who conduct an undertaking of a prescribed description will continue to have a duty under the provision.

The regulations set out ways in which undertakings may be prescribed. The regulations will retain duties on all self-employed persons who conduct specified high-risk work activities or may expose others to risks to their health or safety. I am satisfied that the instrument is compatible with the European Convention on Human Rights.

It is important that I set out a little of the background to the draft regulations. In 2011, the Government commissioned Professor Löfstedt, director of King’s Centre for Risk Management at King’s College London, to conduct an independent review of health and safety regulations. One of his recommendations was to exempt from health and safety law those self-employed people whose work activities pose no potential risk of harm to others. The Government accepted this recommendation and asked the Health and Safety Executive to draw up proposals for changing the law.

Currently, Section 3(2) of the Health and Safety at Work etc. Act 1974 imposes a general duty on self-employed people to protect themselves and others from risks to their health and safety, regardless of the type of activity they are undertaking. The proposed change to the law was included in Clause 1 of the then Deregulation Bill to ensure that only those self-employed who conduct an,

“undertaking of a prescribed description”,

will continue to have a duty. The underlying policy is that self-employed people will retain duties under Section 3(2) only if their undertaking involves carrying out an activity which is specified within the regulations. It was intended that the regulations would consist of a short concise list of activities. The proposed policy was subject to two public consultations and was debated in Parliament. The Government carefully considered the consultation responses and listened to respondents’ concerns during the debates in both Houses. The clause was therefore amended at Report in the House of Lords to ensure that those self-employed people whose work poses a risk to the health and safety of others remain subject to the law. It is these amended regulations that are subject to scrutiny by both Houses of Parliament.

The Bill received Royal Assent on 26 March 2015. The regulations have been drafted to ensure that self-employed people still have a duty under the law when they carry out high-risk activities that create risks for themselves or others. This is intended to include the most common activities carried out by the self-employed and those which statistically result in high numbers of fatalities or injuries. This approach puts beyond doubt that these self-employed people will not be exempt from health and safety law, irrespective of what they do.

Work activities in agriculture, on the railways or involving gas and asbestos are included. In addition, the regulations also include any EU requirements that impose a specific duty on someone who is self-employed to protect themselves from risks to their own health and safety. This brings in work with genetically modified organisms and self-employed people who work on construction sites. This is the key part. There is a catch-all provision in the regulations so that self-employed people who carry out an undertaking which may expose others to risks to their health and safety are included. We are exempting only those self-employed people who do not pose a risk to the public and who are not going to sue themselves.

The Government acknowledge that the self-employed will need some help to understand this change and to limit the possibility of incorrectly assessing whether their work activities may expose others to risk. The Health and Safety Executive will therefore produce guidance to support the regulations. This will also signpost existing guidance which explains in practical terms what they need to do to comply with health and safety legislation.

[Baroness Donaghy (Lab)]

My Lords, I regret that these regulations are before the House. As they are here, I think they are the least worst option. I see from the impact assessment that a “probabilistic” approach was taken to these regulations. It is not a word I have ever heard of. I hope they veer towards the probable rather than towards the ballistic in their outcome.

As the Minister has said, the catch-all provision to ensure that those self-employed persons who may pose a risk to others are not exempt from Health and Safety law is at least an improvement on the original intention. The word “may”, however, leaves an awful lot to be desired. This all arose, of course, from an explicit assurance by the noble Lord, Lord Wallace of Saltaire, to my noble friend Lord McKenzie of Luton, who was seeking inclusion of this provision in the Bill.

I still believe that the phrase,

“may pose a risk to others”,

will cause confusion. Professor Löfstedt actually recommended exemption from Health and Safety law for,

“those self-employed people whose work activities pose no potential risk of harm to others”,

which is what the noble Baroness herself just quoted. There was no “may” about it.

It may be that the impact will be minimal because, even under current legislation, there is evidence that a significant number of self-employed people do not think the Health and Safety at Work etc. Act applies to them. In one piece of qualitative research, only five out of 60 people interviewed thought that they had any health and safety obligations. Not a single one of them responded to say that this change would make a difference to their working practices.

The regulations may be more about perception than a real change, as stated by Professor Löfstedt. In one sense, I hope that is correct, and that health and safety at work will not diminish. However, perceptions are extremely important, and these regulations may encourage the perception that not only is health and safety a burden but that it is respectable to avoid obligation. There is still potential for self-employed people to assess incorrectly whether the exemption applies to them. The Health and Safety Executive guidelines—to which, again, the Minister referred—are still in preparation, so we do not know what impact or coverage they will have.

With approximately 266,000 new businesses being established each year, we do not know what impact these regulations will have on them. As the impact assessment points out:

“The newly self-employed will still need to spend some time determining whether they are exempt under the proposals”.

I hope it will be made clear, in communicating information about these regulations, that there are still more than 40 sets of regulations that apply to the self-employed, either explicitly or in more general regulations. For example, the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations, known as RIDDOR, will still apply. When I was preparing my report on fatalities in the construction industry, I was concerned about the low level of reporting of accidents and injuries under RIDDOR. It was quite clear that hospitals were more likely to know the extent of occurrences under RIDDOR than the reporting mechanism itself. It was also clear that there was a pattern that low levels of reporting on minor injuries also saw a higher proportion of serious injuries and fatalities. I realise that these comments apply to construction, which is not an exempt industry under these proposals, but I am making the point that, if anything, there is a problem of underreporting, which can lead to more accidents. It is in the interests of government and the taxpayer, as well as the self-employed person, to be conscious of the costs to the health service and the DWP of any increase in accidents at work. This is why I remain concerned about the policy of exempting people from an Act that has served and is serving this nation well.

[Lord Cormack (Con)]

My Lords, it is very clear from what the noble Baroness has said that the health and safety of the English language are at risk. I should like an assurance from my noble friend that the word “probabilistic” will never appear again in any document or on the Floor of this House. I should like an assurance that she will take some time during the Recess to distribute to everyone within her department a copy of Sir Ernest Gowers’ Plain Words. May we also have a resolution that, when we come back in the autumn, acronyms will be banned?

[Lord Kennedy of Southwark (Lab)]

My Lords, I agree entirely with the comments of my noble friend Baroness Donaghy. She is absolutely right to raise her concerns. I also want to raise the question of the agriculture industry. I know that this industry is prescribed; it is the most dangerous industry working today. There is a shocking level of drownings, electrocutions and other fatalities in this industry. It has a really appalling record. I hope the noble Baroness can comment on that today because it really is an industry in which a lot of individuals work and in which some very serious injuries take place. Frankly, the regulations at present are not good enough or strong enough, and need strengthening in that industry.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the noble Baroness, Lady Altmann, for introducing these regulations. I welcome her to what I understand to be her first foray into the health and safety debate. The Minister will doubtless be aware of the extensive legislative consideration given to this matter in what was then the Deregulation Bill—now the Act—which culminated in the provision now enabling these regulations.

As we heard, these changes to the Health and Safety at Work etc. Act 1974 have their origin in the report of Professor Löfstedt entitled Reclaiming Health and Safety for All, in which he recommended that those self-employed people whose activities posed no potential risk of harm to others should be exempt from the general duties under that Act. This recommendation was made, notwithstanding that it was generally acknowledged, included by the professor himself, that these duties did not overly burden the self-employed, and that any requirements in these circumstances would be minimal in time, cost and enforcement effort by the HSE and local authorities. Their main duty was to carry out an assessment of the risks to themselves and others that are relevant to their work. There was no necessity to record the findings. The impact assessment that accompanies the regulations estimates that those within the provisions would have spent on average just 15 minutes a year on this endeavour. Paragraph 58 of the impact assessment further states:

“One current requirement that the self-employed might not comply with if they became exempt is carrying out a risk assessment considering risk to themselves. However, in order to know whether they qualify for the exemption, they would still need to assess whether their work poses risk to others, and it is likely that any risks to themselves would arise from the same factors”.

So there is no particular practical easement from that perspective.

15:30

Although we supported the overall thrust of Professor Löfstedt’s report, we hold to the view that to implement this recommendation is, to use the words of IOSH, “unwise and unnecessary”. The scope for confusion over who is covered and who is not, and the minimal overall benefits calculated—less than £1 million a year, with estimated upfront costs of £3.4 million—strongly argue still for the original scope of Section 3(2) of the Health and Safety at Work etc. Act to be retained. But changes to primary legislation preclude our going back.

The argument that this is all in the interests of tackling perceptions about over-burdensome inspection and prosecutions is simply not tenable. The facts dictate otherwise. Surely, so far as perceptions are concerned, the task is to challenge misperceptions rather than to pander to them. The Minister will be aware that there were a couple of attempts by the previous Government to implement a Löfstedt approach which fell well short of being acceptable. The penultimate attempt at prescribing a list of high-risk activities which, if carried out by the self-employed, would cause them to remain subject to the 1974 Act with all other self-employed outside was greeted with a storm of criticism not only from the health and safety community—RoSPA, IOSH, IIRSM and safety groups—but from the CBI, EEF as well as the TUC. The HSE’s consultation clearly demonstrated this approach to be untenable.

Thankfully, the coalition Government belatedly listened. While not abandoning an approach of a high-risk list, they were persuaded to add a “catch-all” provision to include within the provisions of Section 3(2) of the Act those self-employed whose activities may pose a risk of harm to the health and safety of another person. We support this as far as it goes, but note that it does not replicate any previous obligations on the part of the self-employed to avoid risks to their own health and safety, unless they are on the prescribed list. However, the HSE has never prosecuted anyone for putting at risk their own health and safety.

I have some questions for the Minister. Can it be confirmed that nothing in the Deregulation Act or these regulations diminishes in any way the health and safety obligations of others to the self employed? Can it also be confirmed that, similarly, nothing diminishes the obligation of the self employed to their employees or to others in respect of activities which may pose a risk of harm to them; that is, Section 3(1) and Section 2 of the Act will continue to apply? Can the Minister explain the reference to “employees” in Regulation 2(b) given that Section 3(2) of the 1974 Act supposedly only applies to self-employed who are without employees?

To the extent that, previously, the self-employed posed no risk of harm to others, the substantive change appears to be in respect of the self-employed’s duties not to expose themselves to risks to their health and safety. Does the Minister agree with the impact assessment that this easement will have little practical effect on the risk assessment they will continue to undertake?

The HSE is to produce guidance. Is this now available in final form given that the regulations come into force in less than three months? I think that there was a commitment to have them ready 12 weeks or three months before implementation.

What definition is being used for “self-employed”? The Minister will doubtless be aware of the long-standing difficulties of what is known as the bogus self-employed, which is an issue that my noble friend Lady Donaghy focused on relentlessly in her report on the construction industry. While many in this category would be involved in construction, and whose activities would be in a prescribed category in any event, uncertainty of status can only create uncertainty of application of health and safety regulations. If a self-employed person’s activities are not listed in the schedule, they have to make a judgment about whether they pose a risk of harm to others. To what extent is that process and judgment different from that which would have taken place before the amendments to the 1974 Act were made?

Paragraph 18 of the impact assessment makes it clear that more than 40 sets of regulations which apply to the self-employed, including RIDDOR as referred to by noble friend. The regulations before us deal with the general duty, but can the Minister explain their impact, if any, on these other regulations and the requirements they place on the self-employed?

We see these regulations as an improvement on where we might have been heading when government first turned its mind to Professor Löfstedt’s recommendation. But they remain unsatisfactory because of the uncertainty created; unsatisfactory because of the risk that the view will take hold that there is a general exemption for the self-employed; and unsatisfactory because they reinforce the idea that health and safety is unnecessary and burdensome.

Although the list of prescribed activities in the schedule is shorter and more precise in some respects than earlier offerings, it still relies on references which will not be familiar to all. The list of categories attached to the impact assessment might be read by some as negating the need for individual risk assessments.

We welcome the plans for a review, but are concerned that it might be as long as five years before it comes to fruition. Are there any plans to do it earlier in that five-year period? These are important regulations potentially touching on matters of life and death. We believe that they bring unnecessary change, but one which must now be made to work effectively. Therefore, we will reluctantly not oppose them.

[Baroness Altmann]

I thank noble Lords for their comments, and I thank the noble Baroness, Lady Donaghy, and the noble Lord, Lord McKenzie, for their, albeit reluctant, welcoming of the proposals.

I want to provide some clarifications that were asked for by the noble Lord. The obligations of the self-employed to others are unaffected. Their obligations to employees are unaffected and Section 3(1) and (2) will still apply.

I also make it clear that the exemptions will be clarified in specific, detailed guidance from the Health and Safety Executive. The definition of self-employed that the noble Lord, Lord McKenzie, asked me about is in Section 53 of the Health and Safety at Work etc. Act and is rather broad, stating that,

“‘self-employed person’ means an individual who works for gain or reward otherwise than under a contract of employment, whether or not he himself employs others”.

A director of a limited company is an employee of that company. If that company employs others—that is, is an employer—it will have duties under Section 2 of the Health and Safety at Work etc. Act towards its employees.

I take my noble friend Lord Cormack’s point about the term “probabilistic”, which seems to have been more ballistic today than one might have expected, and I will relay his request to the department. As far as banning acronyms is concerned, as someone who is steeped in pensions, these have often been the bane of my life and I sympathise to some degree.

I share the concerns of the noble Lord, Lord Kennedy, about the agriculture industry. It is indeed an industry, as is construction, in which there have been an enormous number of accidents and fatalities. The duties on the self-employed to report accidents are not affected in any way by these changes but it is anticipated that they will remove 1.7 million people from the scope of Section 3(2) of the Health and Safety and Work etc. Act 1974 and will result in savings to the self-employed of £4.7 million over 10 years. Obviously, the source of those savings is subject to estimation but it appears that a number of self-employed people who do not pose any risk to others, such as a bookkeeper working from their own home and not coming into contact with anybody else, mistakenly believe that they are required to carry out health and safety assessments or are approached by consultants who lead them to believe that they need to spend money on having such an assessment. I entirely agree with the noble Lord that as long as the guidance is clear and the clarifications are available—so that people who are exempt know they are exempt, and those who could pose a risk to the public and are therefore not exempt will be able to identify themselves—this should indeed result in savings, as recommended by the Löfstedt report.

We have had an independent review. We have listened to the concerns and the requests for amendments that have been made, particularly by the noble Lord, Lord McKenzie, and have responded to those. The catch-all phrase in Regulation 2(b) should make it absolutely clear that we are intending to cover anybody who potentially poses a risk to the public, and they will still have to comply with health and safety regulations.

[Lord McKenzie of Luton]

The Minister referred to the 1.7 million people who will be taken outside the scope of the Health and Safety at Work etc. Act. What estimate has been made of the number of those people who would have to undertake a risk assessment in the first place to determine whether or not they pose a risk to others?

[Baroness Altmann]

We would expect that if they are exempt they would not need to undertake a health and safety risk assessment. The idea is that it will be made clear to them if they are working in such conditions that they pose no threat to the public. As I described, if you work from your own home and you do not come in contact with the public, you will not need to do a health and safety self-assessment, and somebody will not come along and say, “Oh, by the way, everybody has to conduct a health and safety assessment”. However, of course, if you are employing other people, that will still be required. I hope that that answers the question.

I understand that it is difficult to imagine how this will work until it is actually working, but the guidelines and the guidance will be available six weeks before the regulations come into force. There will be an extensive campaign to publicise this change and to explain it to the public. Our estimates have been made and we are accepting the recommendations of an independent review. We are talking only about someone who is self-employed so our expectation is that this will save both time and money; it will also save those self-employed people who are now exempt from having to keep up to date with any changes in health and safety regulation, which in itself can take time or cost money.

We are aiming to help businesses. We expect that more new businesses will start up as a result of this. Again, one cannot demonstrate precisely how many—

15:45

[Lord McKenzie of Luton]

I am sorry; I promise not to interrupt again. Is the Minister seriously saying that an estimated 15 minutes a year has been prohibiting self-employed businesses from starting up and flourishing; or that the minuscule savings that, in aggregate, even on these estimates, are expected to accrue will affect the growth of self-employed businesses? There have been some 200,000 new businesses in recent times in any event. They do not seem to have been inhibited by overburdensome health and safety regulations.

[Baroness Altmann]

I accept that it is impossible to prove but that is the expectation of the department. At the margin—these decisions are often important at the margin—some people will be reassured to know, if they are intending to set up only as a self-employed person working from home, that they are not included in the health and safety requirements they are now being exempted from. It is impossible to say, as with all such things, but we certainly have been advised that, and it is the view of the independent reviewer that, this will make a difference. Therefore, we are recommending these changes.

[Lord McKenzie of Luton]

I said that I would not intervene again, but I want to stress to the Minister that the statement made that those working at home can be outside the Health and Safety at Work etc. Act is very dangerous. To make blanket assertions in such a bold way—that no one in that situation will pose a risk of harm to others or need to undertake a risk assessment—is highly dangerous. I apologise for interrupting. I will not do it again but we have to stress the importance of not going down that path of encouraging people to think that they are outside the provisions of this very important legislation.

[Baroness Altmann]

I absolutely share the noble Lord’s view that this is very important legislation. The advances we have made in health and safety and the consequent reductions in accidents, along with the measures introduced all those years ago, are a significant achievement and success. However, I am suggesting that certain businesses can be exempted from this provision because they pose no risk to the public. I certainly would not wish to give the impression, and I hope I have not, that everybody who works from home is exempt. One million self-employed people will still be covered by the regulations. They will apply only to certain types of activity and they will be made clear. They will be clarified by the guidance and by the campaign that will be launched six weeks before these measures come into effect.

[Lord Hodgson of Astley Abbotts (Con)]

Perhaps my noble friend might like to explain to the noble Lord, Lord McKenzie, and the party opposite that what is actually needed here is common sense, not risk assessment. Risk assessment is a formal legal process. People should use their common sense to make sure that they look after themselves. I think that is what my noble friend is trying to drive at and it must be the right way to proceed—to avoid paper form-filling and unnecessary diversion of effort for people who, with common sense, could work it out for themselves.

[Lord McKenzie of Luton]

But is risk assessment not a matter of common sense?

[Baroness Altmann]

I thank my noble friend Lord Hodgson for his comments. I would certainly be of the view that in the cases one could imagine these regulations applying to, it would be common sense to identify whether you pose no risk to the public in the work you are doing. You would therefore not need to carry out a health and safety assessment on yourself or your place of work if you do not pose any risk to anybody else. As I have said, a self-employed person who is an employer will continue to have duties under the Act; so will anyone who carries out high-risk activities.

[Lord Kennedy of Southwark]

I made reference to the problems in the agriculture industry, which is the most dangerous in which to work in the whole of the UK. I am certainly of the opinion that either the regulations are not strong enough at present or they are not enforced properly. Will the noble Baroness look at the list of injuries—drownings and electrocutions? It is a shocking tale in that industry and something really needs to be done about it.

[Baroness Altmann]

I certainly agree with the noble Lord, Lord Kennedy, about agriculture, which is a prescribed activity. All self-employed persons undertaking agricultural activities will continue to have duties under Section 3(2) of the health and safety Act. Indeed, if the noble Lord so requests, we will be happy to look at the situation with agriculture. We certainly recognise the importance of keeping agriculture within the remit.

I beg to move that the House has considered these regulations.

Motion agreed.