My Lords, the global tax agreement is to be welcomed, despite inevitably leaving some unanswered questions. As we know, the agreement was struck among the G7—generally the most sophisticated and prosperous of Governments, with more developed tax systems. The tax avoidance industry has yet to be put loose on the detailed proposals to see how resilient they are. Concerns have already been expressed about a loophole being identified, with minimum tax applying only to profits exceeding a margin, and different business models—
Can the noble Lord please put his question?
I am sorry. The question is: so far as further implementation is concerned, what support will be given by the sophisticated economies to the less sophisticated, which might struggle with some of this?
I refer my noble friend to the announcement made by my right honourable friend Patrick McLoughlin. He said:
“I had hoped that we would be able to announce a decision on airport capacity this summer. Clearly, any announcement on airport capacity would have to be made when the House was in session … given recent events, I cannot now foresee that there will be an announcement until at least October”.—[Official Report, Commons, 30/6/16; col. 452.]
My Lords, I draw attention to my interest in the register. I may have mentioned to the Minister’s colleague the strong growth and expansion plans for London Luton Airport, which is just 22 minutes by train from London and serves some 23 million people within a two-hour travel time from the airport. Notwithstanding the Government’s prevarication on Heathrow or Gatwick, will the Minister confirm their continued support for Luton’s expansion and the funding which has been allocated?
I can reassure the noble Lord that Luton, as well as other regional airports in the south-east, is very much being considered. I have already mentioned the three preferred schemes, but Stansted and Luton airports are incredibly important for providing a south-east hub with links to Europe and further abroad.
(11 years, 8 months ago)
Lords ChamberBefore the Minister sits down, can he just help us with one issue? If it is the Government’s position that the problem to be addressed is the perception of a compensation culture, why should that be addressed by making the reality of accessing compensation claims more difficult?
I reiterate that the balance is not right. We have been much helped by the report from my noble friend Lord Young and Professor Löfstedt, who have provided this perception and provided the evidence to allow us to act. This is the right approach for the Government to take.
I am grateful for the points made by my noble friend. That is a very helpful intervention.
Can the Minister give us some examples of where there is gold-plating of regulations under health and safety provisions?
I believe that I covered in Committee and on Report all the aspects that I need to.
All I am saying at this stage is that we are open to ideas so we can hear where further exclusions, above and beyond pregnant workers, might appear.
My Lords, I am bound to say that I found the Minister’s response profoundly disappointing. It was his noble friend Lord Razzall who said that it was a mistake to introduce laws without extensive consultation and who urged the Minister to find a balance. Indeed, the same point was made by the noble Lord, Lord Phillips. Yet I do not see any balance in the Minister’s response.
With this power to make exceptions, the Minister is asking us to do the job of the Government. Frankly, that is not the way round that it should be. The Minister always goes back to focusing on strict liability and extrapolates what is perceived to be the issue around that to all other circumstances where people might be injured at work, then causes there to be a restriction on their ability to get justice.
There seems to be an incredible disconnect between an analysis of the health and safety system and the extent to which there is overcompliance with it, with the solution being to restrict the right of people to claim justice when they are injured at work. For a long time there has been a problem of overcompliance, and now there is undercompliance with the health and safety system as well. That is why, as I know, the HSE is engaged in improving guidance, not helped by the Government having restricted proactive inspections so that inspectors can no longer go out and visit as many premises as they did in the past. There is a huge disconnect there, which does not seem to have any justification.
We have had a very impressive array of contributions to this debate today, from very experienced legal minds, all of whom, with the exception of the noble Earl, Lord Erroll, argued in one direction. I would say to the noble Earl, who mentioned agriculture, that this industry is proportionately the most dangerous in the country. There are more fatalities in agriculture than in any other industry. It is absolutely right that there should be a concentration of health and safety regulations in those circumstances.
(11 years, 11 months ago)
Grand CommitteeMy Lords, before I turn to these amendments I would just like to thank the noble Lord, Lord Stevenson, for his very kind and extensive words of welcome at the previous Sitting of Committee. I look forward to a continuing and fruitful dialogue with the noble Lord. As he said himself, we sing in the Parliament choir together, although I hazard a guess that his tunefulness is somewhat superior to my own. I look forward to working closely with him and other noble Lords over the coming weeks on this Bill. I also confirm that I intend to propose meetings on the various matters where it was suggested this would be helpful at earlier stages of the Committee.
Turning to this group of amendments, I thank the noble Lords, Lord McKenzie and Lord Stevenson, for their amendments to Clause 59 concerning eligibility for the primary authority scheme, which I shall respond to in turn. This scheme was of course introduced by the previous Government, as the noble Lord, Lord McKenzie, mentioned, and has been much welcomed.
Clause 59 broadens the criteria for businesses to be eligible for the primary authority scheme. It will mean in practice that many small businesses that operate in only one local authority area will be able to join, together with similar businesses which share an approach to compliance. I hope that I can answer the question from the noble Lord, Lord McKenzie, about what that means.
The Government see a shared approach to compliance as one that a business consistently follows in order to fulfil its regulatory obligations. Such an approach should result from guidance or procedures issued from a single point, such as a head office or a trade association. This will mean that franchises of the same brand or members of the same trade association, for example, could qualify. They will be able to enjoy the valuable assurance that a primary authority partnership can bring.
The new eligibility criteria have been intentionally drafted broadly. This is to ensure that as many small businesses as possible can benefit from reduced regulatory burdens. A business will be able to join the scheme only if the Secretary of State is satisfied that the business meets the eligibility criteria, and statutory guidance will provide more detail about the matters likely to be taken into account in assessing eligibility under the new criteria.
It is intended that further detail as to the circumstances likely to constitute a shared approach to compliance will be included in statutory guidance. Adding further detail to the drafting of the clause could inadvertently restrict participation in the scheme for the very businesses that this clause is attempting to help.
Of course, having a broad definition of a shared approach to compliance in the legislation means that a wide variety of groups of businesses could qualify for the scheme and the nature of the resulting partnership will rightly need to vary. For example, where a trade association acts purely to distribute information to its members, the primary authority partnership will be very different from one which involves a trade association that provides a fully audited accreditation scheme for its members.
This type of detail will also be given in the statutory guidance and the statutory mechanism for scrutiny of proposed new partnerships by the Secretary of State provides assurance that shared approaches to compliance will be handled appropriately.
Amendment 28ZDB seeks to impose a statutory requirement for consultation before the Secretary of State issues statutory guidance on shared approach to compliance. Guidance for businesses and local authorities will be very important to provide detail of how the extended scheme will work in practice. The views of all interested parties will be vital in making the scheme work as well as it possibly can. For this reason, a commitment was given during Committee debates in the other place that,
“any guidance published as a result of the clause will be developed in consultation with stakeholders, including businesses, local authorities, trade associations and business groups”.—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/12; col. 606.]
I should like to pick up on a number of the comments raised. My noble friend Lord Deben asked about continuing the process. The Government are committed to the primary authority scheme. It is a key tool in reducing red tape and ending the tick-box culture of regulation.
The noble Lord, Lord McKenzie of Luton, asked at the beginning of the debate whether there were any extensions to primary authorities in the pipeline. I can confirm that the Government are consulting on extending primary authorities to include several new regulations, including those on sunbeds, if I read the noble Lord correctly. He also asked about statutory guidance and consultation. The Secretary of State already issues statutory guidance in relation to the primary authority scheme, and Clause 59(5) provides that the Secretary of State can also issue guidance on the matters likely to be taken into account in assessing whether a business meets the new “shared” approach to compliance test. In Committee in the House of Commons, a commitment was made to develop guidance in consultation with stakeholders, including local authorities. I can confirm that the existing statutory guidance will be updated to include further content relating to these proposals. This will be in place, in time for the proposed extension of eligibility becoming effective.
In summary, I hope that noble Lords will not press their amendments, because I hope that I have provided sufficient reassurance that these matters will be dealt with by guidance, taking into account the views of interested parties.
My Lords, I thank the Minister for his reply, which has helpfully taken us forward a little bit. The extension proposed is much more focused on the assured advice component of the primary authority, rather than inspection plans. But I will not pursue that at the moment. I welcome the repeated reassurance that consultation will precede any issue of guidance. That is helpful. I am certainly pleased to see the enthusiastic support of the noble Lord, Lord Deben, for this approach, and indeed that of the noble Lord, Lord Curry.
The wording “material extent” was simply a peg on which to hang an amendment so that we could have the discussion that we have just had. I accept entirely that if it appeared in its current form in the Bill it would not be particularly helpful. I thank the Minister for his comments and I beg leave to withdraw the amendment.
My Lords, I thank the noble Lords for their amendments to the inspection plans clause, to which I shall respond.
Clause 60 strengthens inspection plans so that local authorities must not deviate from a valid plan without prior agreement from the primary authority. This will ensure that inspection plans can have maximum impact to reduce the burden of regulation for businesses and regulators, and target scarce resource where it is most needed. Amendment 28ZDC proposes that the legislation should require inspection plans to have regard to the way other regulatory bodies exercise equivalent functions.
This is an interesting idea and it gives me the opportunity to underline the Government’s view that it is paramount for regulatory bodies to work together consistently within the system. That said, we do not feel that this amendment is necessary. The legislation already requires primary authorities to take into account relevant recommendations of other regulators relating to inspections when developing inspection plans. The statutory guidance reinforces this requirement.
Further, processes have been agreed with the regulatory bodies, which ensure that national regulators have the opportunity to comment on draft inspection plans before the Secretary of State gives consent. There are support mechanisms that allow primary authorities to raise queries and assure themselves that their course of travel is in line with policy and best practice in the area.
Amendment 28ZDD proposes that an exception be made to the binding nature of inspection plans where a local authority believes that it is not appropriate in the circumstances to carry out particular inspection activity in accordance with an inspection plan. The Government agree entirely that there may be circumstances where it is not appropriate for inspection activity to follow inspection plans.
The underlying statutory guidance accordingly makes clear that inspection plans apply only to routine inspections carried out in a proactive way by the local authority. An inspection plan would not impede a local authority in responding to specific complaints or local intelligence. In fact, a plan is likely to strengthen an officer’s ability to react by providing important information about the company and its approach to compliance.
I should like to make it clear that there is nothing in the proposed changes to the operation of the primary authority scheme or inspection plans that would prevent or delay local authority action in response to complaints or specific local concerns. The Government firmly believe that primary authority inspection plans must become binding and I shall give detailed reasoning for that in the stand part debate, which we will come to in a few moments.
I will pick up on a point raised by the noble Lord, Lord McKenzie, concerning the Health and Safety Executive’s role in relation to local authorities. As the noble Lord described in detail, the Health and Safety Executive worked through local authorities for categories of businesses considered as low-risk. I should clarify that “primary authority” applies only to local authority regulators. The Health and Safety Executive responded to Professor Löfstedt’s recommendations separately. I hope, therefore, that noble Lords will not press these two amendments as the existing scheme for inspection plans contains the necessary safeguards.
My Lords, I am grateful to the Minister for his response. I certainly do not propose to press these amendments or take them forward on Report. I am not sure that the Minister’s reply, which was generally helpful, fundamentally dealt with the position of the HSE and the split enforcement role of health and safety between local authorities and the HSE, particularly with the quite clear proposal that came from Professor Löfstedt’s report. I suspect that this is a debate for another occasion and not for the content of this Bill. Accordingly, I beg leave to withdraw the amendment.
My Lords, these three government amendments have the effect of removing new Section 47(2B) of the Health and Safety at Work etc Act 1974, and any references to it from Clause 61. New Section 47(2B) is a new regulation-making power. The effect of the power is to enable the Secretary of State to make regulations, subject to affirmative procedure, which make changes to the extent to which,
“other health and safety legislation”,
is actionable.
“Other health and safety legislation”,
is defined as,
“any provision of an enactment which relates to any matter relevant to any of the general purposes”,
of Part 1 of the 1974 Act.
The general purposes of the Health and Safety at Work etc Act include securing the health, safety and welfare of persons at work; protecting persons other than persons at work against risks to health or safety arising out of, or in connection with, the activities of persons at work; and controlling the keeping and use of explosive or highly flammable or otherwise dangerous substances.
In its report published on 15 November 2012, the Delegated Powers and Regulatory Reform Committee, although content with the other regulation-making powers in Clause 61, was concerned that the power in Clause 47(2B) appeared to be very far-reaching, particularly since the purposes of the 1974 Act went beyond the health and safety of people at work. The committee considered that the power was inappropriate and recommended that the new power in Section 47(2B) should be removed from the Bill.
The Government have reflected on the comments of the Delegated Powers and Regulatory Reform Committee and, on further consideration, accept that it is not necessary to take such a wide power to amend other legislation as there are no current plans to extend the policy to other legislation. I am happy to say that we have therefore accepted the recommendation of the Committee. These three amendments give effect to that recommendation. I trust that noble Lords will support this improvement to the clause. I beg to move.
My Lords, we are happy to support these amendments. They seek to remove a very extensive power which could draw a wide range of circumstances into the ambit of duties which cease to be actionable. As the Delegated Powers Committee put it, there is no discernible policy objective to the inclusion of the proposed new Section 47(2B). The scope could be incredibly wide: any provisions of any enactment which link to any matter relevant to any of the general purposes of the 1974 Act—that is the Health and Safety at Work etc. Act. The Delegated Powers Committee has pointed to just one example: the control and keeping of dangerous substances. It is therefore absolutely right that the Government have backed off on this; they are very wise to do so. It is illustrative of a dangerous desire to accumulate draconian powers, but I am pleased that the Government have stepped back from that on this occasion.
I thank the noble Lord, Lord Browne, for that intervention. I shall answer his questions in a moment.
It now falls on me to answer a number of questions, which I will do in a particular order, if I may. The first substantive question came from the noble Lord, Lord McKenzie, and concerns the basic concept of why there was no review or consultation, as he put it. I assure him that the noble Lord, Lord Young, and Professor Löfstedt consulted widely and found that there was significant and consistent evidence from businesses that the perception of a compensation culture and the fear of being sued have a significant effect in driving overimplementation of the law, and going beyond what the law requires creates unnecessary costs for employers, diverting them from focusing on taking the practical day-to-day steps to protect their employees. Professor Löfstedt, in addition, had concerns that the wider reforms to the civil litigation system and changes to simplify the health and safety system would be less effective if business continued to overimplement the law due to a fear of being sued.
If the Government’s case is that there was consultation and that Professor Löfstedt undertook that consultation, why did the Government not follow his recommendations?
As has been mentioned earlier, we are following the vast bulk of his recommendations.
I shall try not to prolong this, because I know that the Minister has a lot to get through and the clock is ticking. Clearly, the Government did not follow the recommendation related to strict liability. Or is the Government’s case that it did?
In answer to the noble Lord, I would say that it is not black and white that we followed all the recommendations from Professor Löfstedt, but I shall certainly write to him to explain which recommendations we did follow and which, perhaps, we did not.
The noble Lord, Lord McKenzie, also raised the issue of whether the issue is wider in scope than the Löfstedt recommendation. Amending each strict liability duty individually, as Professor Löfstedt suggested, would be complex, as I mentioned earlier, requiring a large number of changes to many sets of regulations, and confusing for employers. A single amendment to the Health and Safety at Work etc. Act addresses the same policy objective, is simple to understand and provides a consistent approach to civil litigation for all areas of activity covered by health and safety at work legislation.
The noble Lord, Lord McKenzie of Luton, also raised the question of whether the change would mean that cases were more difficult and costly to prove, and that employers would hold all the information. Employees will still have the right to bring claims when fault on the part of their employer can be proved. Currently, most claims are brought for breach of statutory duty and negligence, and in future it is expected that most claims will still be able to be brought for negligence.
I am sorry, but we are dealing with some very important points here. On this mantra that most claims are brought under negligence and breach of statutory duty—even if it is right, and I am prepared to accept the Minister’s word on that—is it not right that they do not necessarily all proceed to the end of all those processes? The breach of statutory duty process leads to negotiations of settlement way beyond what you get for some of the burdens claimed for negligence.
It is clear that the vast majority of cases will be covered by negligence and that a small number of cases will fall outside. We should be clear about that.
Many health and safety duties are qualified by “so far as is reasonably practicable”, as was mentioned earlier. In practice, the tests applied for negligence and breach of statutory duty, qualified by “so far as is reasonably practicable”, are likely to be very similar. The record-keeping requirements of health and safety legislation will continue to ensure that information is available to employees where an accident has taken place.
I turn to the question raised by the noble Lord, Lord Monks, concerning the European position. Under European Union law, member states can generally decide what sanctions and remedies to put in place to enforce EU obligations, subject to certain rules. In Great Britain, health and safety obligations are backed by various enforcement powers and criminal sanctions as well as the opportunity to claim for compensation in the civil courts, which will remain through the right to sue for negligence. Taken as a whole, the sanctions available for the enforcement of EU directives are, and will continue to be, effective.
I turn to the various points made by the noble Lord, Lord Browne. One of the questions that he raised concerned how much money is currently returned to the state by the Compensation Recovery Unit, and how much will be lost by this amendment. That is a very straight question. It is not possible to disaggregate the amount because the benefits available are dependent on individual circumstances. He also raised a point about the reform in terms of shifting the burden of supporting employees who are unable to make a claim to the state. Again, that was a very straight point. As I mentioned to the noble Lord, Lord McKenzie, it is recognised that a very small number of employees may not be able to claim in future under the new arrangements. None the less, this change is important as part of the wider package of government reforms in signalling an end to the perception of the compensation culture. Provision for non-contributory no-fault compensation payments—I emphasise that—for disablement caused by an accident at work is already available to individuals through the Industrial Injuries Scheme. All serious incidents will continue to be investigated by the Health and Safety Executive.
The noble Lord, Lord Browne of Ladyton, also brought up the perception of the compensation culture. Businesses have expressed concerns about this fear. It is true and it has long been a driver of overcompliance. That was very clear to the noble Lord, Lord Young of Graffham, and, indeed, to Professor Löfstedt.
One of the crucial questions that the noble Lord, Lord Browne, raised, which was also raised rather more obliquely by the noble Lord, Lord Young of Norwood Green, was that of evidence. I should emphasise that, in conducting his review, Professor Löfstedt consulted most widely, including 30 meetings with individual stakeholders and several business forums. He also received 250 written submissions. The findings of his review build on the work completed by the noble Lord, Lord Young of Graffham, in his report, Common Sense, Common Safety. In preparing his report, the noble Lord consulted 132 wide-ranging organisations representing relevant professionals, including personal injury lawyers, businesses and associated organisations. He also spoke to more than 100 individuals, including health and safety professionals, Members of Parliament, councillors and leading academics in the field of law. I hope that goes a little way to answering the noble Lord’s question.
The noble Lord, Lord Browne, also asked what the Government’s assessment was of the number of claims that this change will affect. It is anticipated that there will be only a small reduction in the number of claims made as most will still be able to be brought for negligence, as mentioned earlier. The only claims that are significantly affected will be those which rely on a breach of the law where there is no, or insufficient, evidence to prove the employer was negligent.
Finally, the noble Lord, Lord McKenzie of Luton, raised the issue of negligence and the fact that the breaches of statutory duties were not equivalent and that the tests for negligence were nebulous. I think that was the term he used. Negligence and breach of statutory duty are different tests but most statutory duties require an employer to take such steps “as are reasonably practicable”. The common law requires an employer to take reasonable care for the safety of their employees. In practice, in the vast majority of cases the issues in dispute will be the same and the standard expected of the employer is likely to be very similar as now. As I mentioned earlier, the statutory framework will continue to inform the courts about the standards expected of the reasonable employer.
For the reasons that I have outlined, I commend the clause to the Committee.
The noble Viscount referred to my use of “nebulous”. If I remember correctly, that is the Government’s word, and was in the impact assessment. Coming back to the timing of this clause being introduced into the Bill, he referred to the fact that it could not go in earlier because of the Löfstedt report. Professor Löfstedt reported in November 2011, and indeed the Government responded in November 2011. That was time enough to get it in earlier.
I have certainly noted the point that the noble Lord has made. I was clearly of the understanding that that was the reason but I will certainly revert and check, given the dates that I have just received from him.