Deregulation Bill

Lord McKenzie of Luton Excerpts

Monday 7th July 2014 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I will speak on housing and, like my noble friends, against the folly of Clause 1 and its changes to the Health and Safety at Work Act. Clause 29 reduces the qualifying period for the right to buy from five to three years. We know that this is part of what the Government have labelled “reinvigorating the right to buy”. It has been accompanied by secondary legislation that increased the maximum percentage discount for houses sold to 70%, and increased the cash cap to £75,000—£100,000 in London—which in future is to be uprated by CPI.

We want to see people enabled to purchase a home, and we support the right to buy. However, housing is in crisis in this country, and especially affordable housing. Last year the Government built the lowest number of homes for social rent for more than 20 years and since records began. Section 106 agreements have been watered down, the capital budget for affordable housing has been cut by 60%, and the affordable rent model is anything but affordable. If recent reports are true, the Government are in panic over the prospect of yet a further fall in housebuilding as the general election looms. The Government’s favourite scapegoat to blame is the planning system, but can the Minister confirm that some 9,000 sites with full planning permission have not yet started building?

Therefore we will press the Government on their declared replacement policy. The formulation which they adopt is that they would use the receipts from additional—note, not all—right to buy sales to replace every additional home sold. We will wish to probe in Committee exactly what that means and how it would work in practice. It does not appear to cover sales under the preserved right to buy, which is to the detriment of the finances of housing associations.

We can see the merit of rationalising technical housing standards and their inclusion in the main building regulations, albeit with scope to deal with local circumstances. The Minister will be aware of the briefing from Leonard Cheshire which welcomes proposals to incorporate lifetime homes standards into building regulations, but expresses concern that they will potentially be optional. We will wish to be reassured that this is not the case.

We should be proud of our health and safety system in the UK. Over 40 years it has helped save countless lives and protected many from injury and ill health. Since this Government came to office there have been three reviews of its scope and operations — that of the noble Lord, Lord Young of Graffham, of Professor Lofstedt, and the triennial review. Each in its way has concluded that the system and the HSE is fit for purpose and doing an effective job.

We oppose Clause 1 not on ideological grounds, nor because our instinct is to resist any weakening of health and safety requirements, and nor because we believe that there is still a lingering antipathy to its cause in some higher reaches of government. We oppose it because whatever minor benefits the clause might bring are more than outweighed by the confusion and uncertainty it will engender.

The position at present is very clear. Under Section 3(2) of the 1974 Act every self-employed person is required to conduct their undertaking to ensure that,

“so far as is reasonably practicable … he and other persons … are not thereby exposed to risks to their health or safety”.

What could be fairer or more decent than that? Yet the Bill will restrict the requirement to those engaged in prescribed undertakings expressed by the Minister in another place to be “high-risk” activities. Notwithstanding that there is only a draft list of prescribed undertakings thus far—although an HSE consultation with a list commenced just today—Oliver Letwin proclaimed in another place that I think about two-thirds of people who are self-employed will no longer be covered by the Health and Safety at Work etc. Act. Why is that something to be proud of?

The Government, as my noble friend Lady Donaghy said, point to Professor Lofstedt as the reason for doing that, but that was not his recommendation. He recommended that an exemption should apply to those self-employed who have no employees and who pose no potential risk of harm to others. Even then, he acknowledged:

“The actual burden that the regulations currently place upon these self-employed may not be particularly significant”.

That point was reinforced by evidence from IOSH to the Public Bill Committee, where Richard Jones made clear:

“To our mind, the proposed exempted group … is not overly burdened by health and safety at the moment”.—[Official Report, Commons, Public Bill Committee, 25/2/14; col. 5.]

As the TUC points out, there is no need to make any change, because anyone who is self- employed but does not pose a risk to themselves or others cannot be prosecuted. They have no need to do a written risk assessment.

The HSE was clear that the best basis for any exemption should be to allow it only to those who would not be expected to put others at risk at any point in the normal course of their work and only if they did not work in certain prescribed industries. Paragraph 18 of the 2013 impact assessment states that,

“we explored the possibility of being wholly prescriptive and making a comprehensive list of the occupations, industries, or combinations thereof that would be covered by the exemption … However, discussion with sector experts within HSE made it clear that within occupations and industries there are many exceptions and atypical cases. Relying exclusively on such an approach would therefore risk unintended consequences”.

What is the huge burden that offending legislation imposes on the self-employed, and which holds back the advance of entrepreneurial zeal? The HSE’s original assessment was that the risk assessment would take—15 minutes a year. Annual savings for the new and existing self-employed would be about £500,000 a year—in aggregate, that is—but there would be upfront familiarisation costs of nearly £2 million. All of that, therefore, for the self-employed to save a quarter of an hour a year and on average less than 50p. The figures for today’s updated assessment tell the same story.

However, the proposition for exemption now in the Bill has greater health and safety risks. The HSE made it clear that some of the occupations proposed to be exempt have injury rates statistically higher than the average for all occupations. These, it said, include motor mechanics, furniture manufacturers, animal care occupations, metalworking, and maintenance fitters. That is a deeply flawed and dangerous position for the Government to take.

First, in framing the exemption using a prescribed list approach, we know that some who operate in risky businesses in a risky way will fall within the exemption. Secondly, even if the exemption could be phrased in a narrower way, the estimated savings are tiny. The prospect of exemption for some will provide another spur to the encouragement for individuals to declare a self-employed status—bogus or otherwise.

There is scope for huge confusion about whether someone will be exempt or not, particularly among the self-employed, who might typically get their information through informal channels and in circumstances when Ministers are talking up the scale and scope of exemptions. There could be confusion for those who take on an employee for part of a year, or whose activities are partly within a prescribed undertaking and partly outside. I hope that the Government will reflect and draw back from Clause 1.