Deregulation Bill

John McDonnell Excerpts

Wednesday 14th May 2014 Commons Chamber

[The Solicitor-General]

I echo the good wishes to my hon. Friend the Member for Penrith and The Border (Rory Stewart) and commiserate with the worthy runners up.

On the Opposition’s amendment 72 to clause 1, the effect of clause 1 is to exempt self-employed persons from health and safety law, except those on a prescribed list of activities, which is to be laid in regulations.

[John McDonnell (Hayes and Harlington) (Lab)]

I believe that a draft list was given to Members in Committee. I tried to obtain it in the Library, but was told that it is not available until the consultation starts. Would it be possible to at least have a copy of what was given to the Committee?

[The Solicitor-General]

Yes, I am sure that that would be possible. I am looking to the Box and to my Parliamentary Private Secretary sitting behind me to see whether that can be achieved. A list was certainly provided. It is not definitive. It was produced on the basis that regulations would be produced and in place by the time of Royal Assent, that there would be proper consultation, and that the Health and Safety Executive would be involved. The idea is that the House has an opportunity to see them and that there is proper consultation on them.

The Government believe that we should reduce the number of administrative hoops that self-employed people have to jump through to free them up to continue to do their jobs unhindered and to continue to contribute to the UK’s economic growth. Currently, section 3(2) of the Health and Safety at Work etc. Act 1974 imposes a duty on every self-employed person to have regard to, and protect against, the risks that their undertaking creates both to themselves and others, regardless of the type of activity they are undertaking.

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[James Duddridge]

It would be an additional benefit to look at these things sector by sector, as the Better Regulation Commission is doing—and is reducing regulation. However, I fear I am straying slightly, as we have done today, away from the pure health and safety issues. The hon. Member for Chesterfield kindly took an intervention on the concept of who is protected on a building site and I must admit that I am still confused. There is a case for stopping people being self-employed from an employment rights perspective—we can debate that, although not today. But although these bogus self-employed individuals take themselves out of a certain type of health and safety liability, by being on the site—by being in the care home or on the building site—they are subject to health and safety rules. There may be a case to make that those rules are too weak or that they are not the same as in an employment relationship, but people are still subject to them.

As I said at the start, something more nuanced could have been proposed, because there is a risk that people do not set up businesses because they are concerned about the overall level of bureaucracy. The hon. Gentleman prayed in aid the World Bank, saying that we are already at the cutting edge for being able to set up businesses, but if we do not look to move forward and constantly improve, as our competitors are doing, biting at our heels, we will fall behind in business growth, in growth and in employment. I say that on a day when I learned from the BBC that employment is at its highest level since 1971, when records were first kept. There is no health and safety protection if one does not have a job. Getting people into employment is a step in the right direction, and getting people involved in high-quality jobs with high-quality health and safety is a further improvement, but it is still a stepping stone. For those reasons, while I support Government new clause 1, I would vote against amendment 72 if it were pushed to a vote.

[John McDonnell]

May I first say that I welcome the new clause relating to the Sikh community? I chair the all-party group on the Punjabi community in Britain, and for a number of years there has been an issue, and it is helpful to get it out of the way now, once and for all. Others have also received representations on the matter, so today’s debate has been useful.

I will be straight with the Minister: I am really worried about this part of the Bill. Before I go into that, I will, like others, outline my background. First, let me refer to the Register of Members’ Financial Interests. Unite has just made a contribution to my constituency party for campaigning. The Independent Parliamentary Standards Authority tells me that we do not have to declare such payments, but I have anyway. I have not received the Unite briefing, but I understand that it has been lobbying on this matter.

I come to this matter from a trade union background—from the shop floor. When I first left college, I worked for the National Union of Mineworkers. Obviously, health and safety was a critical issue for mineworkers. However, it concerned not just those working in the mines but those involved on the surface, in deliveries and so on. My hon. Friend the Member for Luton North (Kelvin Hopkins) has described the process of health and safety at work. The trade unions initially tried to tackle health and safety issues on an industry-by-industry basis. The reason the Health and Safety at Work etc. Act 1974 came about was that we wanted comprehensive overall protection, which is why it was a global Bill; we did not want anyone to miss out. Individual pieces of legislation would not have given us that comprehensive cover.

At that point in time, self-employment was not a big issue, but it is now. The expansion of self-employment in this country—my hon. Friend the Member for Chesterfield (Toby Perkins) gave some figures on that—has been massive. That is partly because people who have lost their job or who have had their job privatised in some form have been pushed into self-employment; some choose it willingly, but others choose it because it is the only option. It is a fact that deaths at work and occupational injuries for the self-employed are twice the rate for the directly employed. If we look at recent TUC statistics on deaths, we will see that there have been 16 fatalities in the past four months, the bulk of which were among the self-employed. Clearly, therefore, there is an issue of health and safety among the self-employed.

Up until now, the simplicity of the legislation has meant that everyone knows that they are covered no matter what. No matter where they are working or what aspect of self-employment they are involved in, they know they are covered by the legislation. My worry is that legislating to solve one problem produces much bigger problems. I accept that there may be an element of truth behind some of the myths of the health and safety culture. Some small examples may be run in the Daily Mail, and we will all agree that they are daft, but the bulk of health and safety legislation protects people. There are too many people dying or being seriously injured at work at the moment. When we meet the families of victims, we understand why health and safety is such a cornerstone, and so essential in protecting people at work. As soon as we try to resolve some of the smaller exaggerations of the health and safety at work legislation, we then open up the possibility of absolute confusion about what is going on.

We will spend the next few months on the consultation about the list. Endless hours will be spent trying to identify what activities are included on the list and what activities are not included. We have already heard something like that today with the issue of what happens in the construction industry.

I have been dealing with Crossrail. Some Members may be aware that a few weeks ago, after a fatality at Crossrail, an extremely damning report about health and safety attitudes on the Crossrail project was published in the media. I am meeting Crossrail management and the unions to try to see how we can resolve those matters. It will be argued that Crossrail will be covered by these provisions because it is part of the construction sector, but the question comes up of what will happen with deliveries to Crossrail sites. Will they be covered when they are purely on the construction site or will they be covered on their way to a Crossrail site?

We will have endless debates and arguments about what happens in construction, which is the area where self-employment has grown in recent years. We have heard about false self-employment, and a lot of construction workers today are basically told to be self-employed or they will not get a job. It is as simple as that and if they try to argue against it they do not get work the following week. That is one of the big battles being joined at the moment by Unite and other unions, including the Union of Construction, Allied Trades and Technicians.

[Mike Thornton (Eastleigh) (LD)]

I used to do an awful lot of work in financial services for people who worked on construction sites. Nearly all of them worked under the old construction industry scheme, or CIS, under which they were classified as self-employed. That was permanent throughout the construction sector throughout the past 20 or 30 years. Surely people being self-employed within the construction industry is nothing new.

[John McDonnell]

No, it is not, but a lot of those workers who were directly employed have in recent years been forced into self-employment against their will. That is the only way that they have been able to get work. If we consider the role of agents in a lot of this, we can see that it is a way of avoiding taxation for some.

[Andy McDonald (Middlesbrough) (Lab)]

Does my hon. Friend recall the words of Lord Denning many years ago when dealing with this very issue of bogus descriptions? Somebody controls the place of work, the rate of pay and the hours that are worked. We can call a Mini a Rolls-Royce, but it is still a Mini.

[John McDonnell]

I have been involved in some of the direct action campaigns on sites across London over the past two years. Few major firms are left in London that employ people directly; they now employ individuals who are classified as self-employed. They have not gone into self-employment willingly, but have been forced into it simply to get the work.

Let me go back to my major theme. Throughout its history, our health and safety legislation has been based on the precautionary principle of trying to ensure that we prevent as much as we possibly can the risks of individual sectors. I have seen the list that the Minister has kindly supplied us with this afternoon and, to be frank, I think—I am not saying this in any critical way—that if we are going to go down the route of having a list system, it would have been better for us to have had the list well in advance for consultation and discussion. Nevertheless, that is what we will have now.

Let me give some examples from the list. The category for high-risk activities relating to public safety includes the:

“Organisation and operation of exhibitions, fairgrounds, amusement parks, theme parks, zoos, circuses, public fireworks displays and adventure activities,”

but not festivals and concerts, which have some of the highest risks of such outside activities. For offshore activities, it includes

“operators, owners, installation managers, well operators and any persons under various Offshore Regulations”,

but some of the highest risk in the offshore industry is land-based, at the port, before the equipment is transferred out.

In years to come, we will define item by item what is on the list and what is not. It is all well and good publishing a list of what is covered, but if people want absolute clarity we should also publish a list of what is not included. Let me give another example, which I think came up in Committee. If a plumber—they are largely self-employed—is working in a person’s home, will they be covered or not? Are electricians working in people’s homes covered or not? I am not sure from this list, and that is the issue. All our health and safety legislation up to now has been based on the precautionary principle of comprehensive coverage so that everyone is protected, including the workers and the general public in whose environment they are working, but we are now in a situation where no one will know or be absolutely clear about their coverage. As a local MP I have used health and safety legislation on a number of occasions to get the local authority to take action against self-employed workers on particular sites that are putting the general public at risk.

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[Toby Perkins]

My hon. Friend is making an important contribution. He is right to say that there is a perception that health and safety is sometimes over-zealously pursued, but the real problem that the Government are trying to solve is their polling position. They are trying to show people that they are taking action in this area, they want to be able to tell businesses about all the deregulation they are undertaking, but they are not solving the problems facing small businesses.

[John McDonnell]

If the Government are going to legislate on the basis of hearsay and almost prejudice, they wind up with legislation that renders itself ineffective in the long run. I genuinely cannot see how the list could be implemented effectively.

[The Solicitor-General]

I am following the logic of what the hon. Gentleman is saying, but he should appreciate that the detailed regulations will be consulted on, which will include proper definitions. He has a list of activities, but the consultation will bore down into the detail. If he or his constituents have particular concerns, he will be able to raise those points and the Government will take account of them.

[John McDonnell]

That worries me even more. I make this not as a party political point, but as a practical governmental point: that means that the legislation is a leap in the dark, before we know in any detail the consequences of what we are doing.

The Government have been looking at the matter for three years now. I met Lord—I have forgotten his name. He got the sack after having a few drinks too many at a reception. I met the original Lord who was consulting on this. He turned up with an individual who I thought was his butler. It was an adviser. He eventually got the push because he had a few drinks too many and said some unwise words. He was so impressive that I cannot remember his name. I met him three years ago when the measure was first mooted. We went through examples of what he thought was unnecessary health and safety legislation in certain areas. One of the areas he was looking at was shops, so I introduced him to the Bakers, Food and Allied Workers Union, which explained to him that health and safety matters were a worry in shops where its workers were.

From that original prejudicial approach, I thought the Government were going to lay out in detail how the duties would be implemented. To introduce the legislation without such detail in such an important area will render the legislation ineffective and put people at risk.

[John Cryer]

What my hon. Friend says about risk is right. In Committee, we asked time and again for a definitive list. The Government kept amending the list. I do not know which version we are on now, but we are almost at the end of the parliamentary process on the Bill, and the Government are now saying that they will consult. That should have been done right at the start of the process; if it had, we would now know what we were dealing with.

[John McDonnell]

There are times when one legislates on the principle and then rolls out the practical implications, but I agree with my hon. Friend that in this instance, because of the legislation’s significance and because the detail is so important to whether it is viable, in the three years when the consultation was supposed to be going on we could have drilled down into the detail and then come back with effective legislation, which would have achieved some element of consensus. Instead we have absolute confusion, and in health and safety matters that means risk. I will vote for the amendment, but I deeply regret the way in which the legislation has been brought forward. The risks that will be incurred will affect many of us, throughout all these different industries, but more broadly, as self-employment now grows, not only will self-employed workers be put at risk, but the general public as well. That is why the Minister needs to think again very seriously.

[Chris Williamson]

I rise to speak in support of amendment 72 and I associate myself with the comments made by my hon. Friend the Member for Hayes and Harlington (John McDonnell) on the proposals for the Sikh community, which are a welcome step.

I do not know whether it is because the Solicitor-General is behind the proposal, but to me it represents a lawyer’s charter. My hon. Friend has already made the point that the prescribed list simply adds to the confusion rather than providing clarity. I am a simple chap, an ex-bricklayer who certainly benefited from the health and safety regime, and I would like to know what is wrong with the present legislation. My hon. Friend the Member for Chesterfield (Toby Perkins) referred to the futility of the proposition in terms of those who are self-employed and not at any great risk, but who have never been prosecuted or are likely to take action against themselves in any event, but my real concern is that the Government are creating significant confusion, which will put people at greater risk.

Other hon. Members have made the point that self-employed people are on average twice as likely to die at work as employed workers. At a time when 4.2 million people are self-employed that is a growing concern, and not just for the individuals who are putting themselves at greater risk and who will go to work one day, as my hon. Friend said, and never return. That is devastating for the families of those individuals, and it is a complete waste of human life. In crude monetary terms, it has a negative impact on the economy, because their productive life is lost to the economy.

We have to take account not only of those who are more likely to die, but of those self-employed workers who are more likely to sustain an industrial injury, and this proposal will make matters worse. We have already spoken about people being forced into self-employment and bogus self-employment. People who are in effect employed earners but are forced into a self-employment do not benefit from the protections accorded to employed earners, and that should be a matter of concern for all of us.

I shall take my previous life in the construction sector as an example. Because of the confusion, we do not know from what the Government have said whether self-employed earners working in a domestic setting will be covered, as my hon. Friend the Member for Hayes and Harlington has pointed out.

[John McDonnell]

We have only one copy of the list—that is how we have been treated today—but we shall share it. I will give one example, and perhaps my hon. Friend will be able to respond to it. According to the list, construction is covered overall, and a number of activities are listed under construction. However, there are sites where there is no construction going on but there is painting and decorating, which is not listed. If no construction was going on and some self-employed painters and decorators—there are a large number of them—turned up to work on the site, they would not be covered because their work would not be construed as construction. However, painting and decorating is actually quite a risky occupation, for the painter and decorator and for the public, because of the use of ladders, scaffolding and so on.

[Chris Williamson]

My hon. Friend is absolutely right. It is potentially an incredibly hazardous occupation, for the very reason he outlines: the use of ladders, scaffolding and so on.

[John McDonnell]

Painters and decorators are not covered, but people on high wires in circuses are. This is getting bizarre.

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[John Cryer]

I am grateful to my hon. Friend for raising that point. I do not remember any specific discussion about whether maritime occupations should be on the list. Perhaps that was partly because we had a separate, lengthy and passionate discussion about maritime investigations. The RMT represents not all but most seafarers, and that discussion took place, oddly enough, just after it was announced that Bob Crow had passed away, and I think that added to the passion in the debate.

[John McDonnell]

There is a reason for the concern. It has been argued that there is not an awful lot of self-employment in the maritime sector, but there is. My hon. Friend knows as well as I do, because he was involved in this, the issues with the Thames cruises, where there is self-employment: individual families own their own boats and there is a licensing regime. Health and safety still needs to be applied to them, but they do not seem to be anywhere near the list.

[John Cryer]

I do not have the list in front of me, but I accept what my hon. Friend says. One of the things that has changed in the past few years—this has happened relatively recently—is that an awful lot of industries now have extensive groups of self-employed people. My hon. Friend mentioned that earlier in his career he worked for the National Union of Mineworkers. It is not particularly widely recognised that most miners—there are not many of them around nowadays, because successive Conservative Governments massacred the deep-mining industry—are self-employed or agency workers, and many of them are on virtually zero-hours contracts.

I think there is a view that anyone working at a deep mine in Hatfield or any of the others that still exist does so for an employer on a normal pay-as-you-earn basis. The reality is that most people who work in mines are self-employed in a very dangerous industry, and some of them—probably those who work on the surface, rather than those who work underground—will be removed from health and safety cover as a result of this Bill. At the very least, confusion will reign, because nobody is quite sure whom the Bill covers and whom it does not.

One of the many bases of this Bill is the idea that there is still a hard and fast division between those who are employed and those who are self-employed. That traditional view of the workplace was accurate 30, 40 or 50 years ago, but it does not apply now, because increasing numbers of people are self-employed and increasing numbers of people come under what Labour Members would call bogus self-employment. These are people who have been shifted to a self-employed status, sometimes against their will. There are examples of work forces who wake up one morning to discover that they are suddenly self-employed, having not been consulted. Before the Solicitor-General is moved to intervene, I know that that is illegal, but I think it is indicative of the world of work that we have today.

Disreputable employers already have several incentives for moving people to self-employed status, including the ability to abandon many of their normal responsibilities—the duty to pay national insurance, sick pay, holiday pay and so forth. More and more companies are now offering different routes for shifting work forces to self-employment. In Committee, I gave the example of the role of payroll companies, which go to normal construction companies—this happens a lot in construction—and say, “Give us your payroll responsibilities. We’ll look after paying the work force. We’ll shift them all to self-employed. As a result, you will escape responsibility for paying NI, holiday pay, sick pay and all the rest of it.” Another impetus is the fact that, because of the cuts to Her Majesty’s Revenue and Customs, it does far fewer compliance inspections than it did five or six—or even two—years ago. The idea that employers will be caught out shifting people to bogus self-employment by HMRC is less likely; it is more likely that they will get away with it.

The Bill provides another incentive to companies—not just those in construction, but in other industries as well—to move people to self-employment so that they can escape their responsibilities. If someone running a construction company who does not particularly care about his or her employees is told, “Well, if they’re not self-employed, they’re not covered by health and safety”, that is another incentive, encouragement or green light to employers to engage in such processes. Some of the processes are legal or on the fringe of legality, but many employers are still getting away with it. The irony is that many of the most dangerous industries, such as construction and agriculture, already have a very high level of self-employment. In some industries, we are moving to a position in which we are seeing the virtual abolition of regular full-time employment.

The TUC issued a briefing earlier today. Many Government Members think that the TUC is populated by blokes who are blood-soaked lefties and all about 8 ft tall, with biceps the size of Bournemouth.

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[Kelvin Hopkins]

Yes, indeed. One of my former colleagues at the TUC, Sir Bill Callaghan, who used to be the chair of the Health and Safety Commission, was alarmed at the threats to the funding and the future of the Health and Safety Executive. Interestingly, when the HSE did a consultation exercise on this issue, a majority of respondents were against what the Government are proposing. The HSE is obviously under-resourced. I want it to be strengthened and to have more resources so that it can save more lives and prevent more injuries.

I will give another anecdote about a recent experience. There were two men working on the pavement outside my house with a diamond-edged cutting disc—the sort of machine that is used to cut stone, brick or concrete. They had no goggles, no hard hats and no ear defenders. I went up to ask what they were doing. I was not going to comment on health and safety. They were clearly eastern European and did not understand English very well. The TUC has said:

“Migrant workers are also more likely to be self-employed and are more likely to have a poor command of English, which means that they need support and guidance from the HSE. Sex out of ten Rumanian and Bulgarian immigrants living in Britain last year were working as self-employed.”

We are talking about a whole sector. Hundreds of thousands of people will be less likely to be protected by health and safety regulations and laws. I think we ought to strengthen the Health and Safety Executive and the 1974 Act. We ought to provide the resources that are needed to ensure that it is enforced properly. There are a number of points that I was going to make, but they have been made strongly by my hon. Friends.

[John McDonnell]

I am not sure whether my hon. Friend has seen the list. In the past, we have raised the risks on the docks, where self-employment is increasingly becoming the norm. My dad used to be a Liverpool docker and he lost a finger as a result of an industrial accident. Although offshore activities are listed, there is nothing about the docks. That whole sector is excluded from the list, yet it is an extremely dangerous area of activity.

[Kelvin Hopkins]

I am sure we could find many areas where health and safety risks are not being addressed, even under existing legislation. We want such legislation to be strengthened, not weakened, but because of the logic of the situation the list of exemptions will inevitably mean that more people die or suffer injuries as a result of the clause. I strongly support my hon. Friends on the Front Bench, and other hon. Friends, in calling on the Government to abandon clause 1, accept the amendment, and return to common sense.