Construction (Design and Management) Regulations 2015

Lord Freud Excerpts

Thursday 26th March 2015 Lords Chamber

[The Lord Bishop of Chester]

My Lords, I have just one brief question for the Minister on the regulations. Paragraph 20 of the impact assessment refers to financial impact. It states that the deemed approach—which is much the better one, I am sure—will cost £1.3 million to homeowners and £4.6 million to contractors. All my experience is that costs to contractors get handed on to the people for whom they are providing their services, so how do we know that the £4.6 million will not simply be handed on to the homeowners to whom the services are being provided? How can one make that distinction?

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, I thank the noble Lord, Lord Stevenson, for raising this issue and giving me the opportunity to reassure him and others on both the key points that he raises, which are the implications for domestic owners and for the entertainment industry. In particular, I reassure his plumber and joiner that their responsibilities in practice will not change as a result of the introduction of the regulations.

Since their first implementation in 1994, the Construction (Design and Management) Regulations—let us shorten them to CDM—have facilitated widespread culture change, improved ownership of risk, and a reduction in fatal and major incidence rates by two-thirds. That is a good news story in everyone’s book, and I welcome the chance to spell that out.

The CDM 2015 regulations are reformed and simplified. They retain technical standards to be achieved on sites, enable reduction in industry bureaucracy and improved compliance in small businesses, and address two areas of underimplementation of the temporary or mobile construction sites directive. Overall, the regulations are estimated to generate net savings to business of £121 million over 10 years. CDM 2015 is thus a significant enabler of growth in an industry employing more than 2 million people.

Despite the numerous benefits that the revision brings, the Government recognise that some businesses have raised concerns arising from the consequences of implementing certain requirements of the directive. The Government had no realistic option other than to implement these measures to comply with our European obligations and avoid the consequences of failing properly to transpose the directive, but we have done so in a way that minimises overheads, and at the same time have taken the opportunity to make the significant reforms to the regulations that I mentioned.

Those concerns relate to lower thresholds for health and safety co-ordinator appointments and written health and safety plans, and in application to domestic clients for the first time. The regulations have always applied to construction work wherever it is undertaken and whatever its scale, complexity and risk. Some stakeholders in the entertainment industry have been particularly exercised that unduly burdensome administrative requirements will now arise for minor construction work that is part of their day-to-day business.

The Government and HSE are aware that there is a sometimes a tendency in parts of the entertainment sector for overcompliance with health and safety requirements. Indeed, the HSE’s Myth Busters panel has dealt with a number of cases from the entertainment sector where a disproportionate approach or decision has been made. The guidance supporting the CDM regulations 2015 stresses the need for a proportionate and practical approach to the management of risk, and this of course is the Government’s goal, too. The industry needs to respond appropriately, and I am encouraged that the HSE is fully engaged with entertainment industry stakeholders to produce sector-specific guidance. This will help the industry to understand how its current management arrangements can be applied to comply with the CDM regulations 2015, and avoid overcomplicating matters which could incur unnecessary cost.

The right reverend Prelate the Bishop of Chester raised issues on costs added to homeowners. Clearly, in the end the costs will be added to homeowners—that is how it works. Contractors do work for people and add on the costs but those costs are extraordinarily small in an economy of—what are we, £1.5 trillion? Costs of £4.6 million are extremely small, particularly compared with the costs that homeowners would otherwise have had if they were not able to deem the issue down to the contractor, which is what this structure does.

To pick up the point of the noble Lord, Lord Stevenson, on the way in which this legislation was introduced through the negative resolution procedure, all health and safety legislation is made in this way. As I have explained, this change to the domestic client provisions was required to comply with EU law obligations and, as I say, that is the way that we always do these changes in HSE.

I think that I have dealt with all the questions raised. Let me thank the noble Lord again because I hope that I have provided reassurance all around that this provision is proportionate, saves money and makes sure that we are actually complying with our obligations.

Motion agreed.