Enterprise and Regulatory Reform Bill Debate
Full Debate: Read Full DebateLord McKenzie of Luton
Main Page: Lord McKenzie of Luton (Labour - Life peer)Department Debates - View all Lord McKenzie of Luton's debates with the Department for Work and Pensions
(11 years, 7 months ago)
Grand CommitteeMy Lords, I beg to move Amendment 28ZDA and to speak to Amendment 28ZDB. These are probing amendments and I doubt that they will delay the Committee for very long. I should be clear that we strongly support the primary authority scheme, which was set up, of course, under the previous Labour Administration following the Hampton review. Despite its short life to date, it has been a success, and we further support the sensible extension of the scheme. When I last checked the numbers back in November, the scheme encompassed some 602 businesses, 93 local authorities and more than 58,000 premises, with 1.6 million employees and nearly 2,000 partnerships. The Minister may have an update on that.
The current criteria for participation require a business to operate across council boundaries, and the regulatory functions covered are health and safety, environmental health, trading standards, food safety and petroleum licensing. There are two main aspects of the scheme: the primary authority will provide assured advice to businesses, and the primary authority and businesses can prepare a national inspection plan. Clearly, the overall benefits to business come from a consistency of approach and the prospect of reducing the regulatory burden and improving regulatory efficiency.
So far as extending the scheme is concerned—as proposed by the report of the noble Lord, Lord Young, and provided for in Clause 59—there are three main dimensions: first, extending the eligibility rules so that more businesses can be included; secondly, strengthening the provisions relating to primary authority inspection plans; and thirdly, widening the range of regulatory areas covered by the scheme. The first of these is dealt with by Clause 59 and the second by Clause 60. As I understand it, the third will be accomplished by way of statutory instrument, and the Government are currently consulting on a specific proposition. We will clearly have the opportunity to consider these in due course, but I have no particular problem with the areas proposed. However, I ask the Minister if there is anything else in the pipeline, and to confirm that regulation of sunbeds is still included now that the noble Lord, Lord Marland, is no longer part of the team.
Amendments 28ZDA and 28ZDB apply to Clause 59, which looks to extend businesses which might be included in a primary authority scheme. The impact assessment identifies situations where this might be accomplished, and in particular identifies corporate groups, franchise arrangements and trade associations. The test for inclusion provided for in the clause depends upon entities having a shared approach to compliance. Amendment 28ZDA is a probe to better understand the Government’s views on the meaning of this phrase. Of course, the provision is not restricted to just those areas identified above. Clause 59 gives a wide power to the Secretary of State to determine whether the shared approach test is satisfied. The Secretary of State may from time to time publish guidance about what is to be taken into account.
Amendment 28ZDA seeks a better understanding of the Government’s interpretation of a “shared” approach to compliance. The Minister in another place said that it simply means that businesses consistently followed the same centrally issued guidance to fulfil their regulatory obligations. I suggest that this is a bit thin; anyway, it seems to focus on the assured advice benefits of the scheme rather than on the national inspection benefits. I offer the Minister the opportunity to put more on the record about the scope of this. As for the development of guidance, our amendment requires this to be done after due consultation and that this requirement should be in the Bill. When is the first guidance to be available and what consultation is planned for this? Perhaps the Minister can let us know. I beg to move.
My 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, in moving Amendment 28ZDC I shall also speak to Amendment 28ZDD.
Amendment 28ZDC is a probing amendment designed to focus on the issue of health and safety and the split responsibility between the HSE and local authorities. This was another issue raised by Professor Löfstedt in his independent review of health and safety legislation. The HSE is the national regulatory body responsible for promoting better health and safety and setting the parameters for enforcement activity, but enforcement and inspection activity is split between the HSE and local authorities. The HSE is responsible for traditionally high-risk places and local authorities for those that have less risk.
As Professor Löfstedt’s review points out, there have been many good examples of joint working and co-ordination between the HSE and local authorities, including joint inspections and flexible warranting. An engagement of primary authorities in this process certainly enhances outcomes. Professor Löfstedt identifies that, despite improvements, there remain inconsistencies across local authorities’ implementation, with some local authorities assigning a lower priority to health and safety than, say, food safety. He also drew attention to the problem that the premises that are considered relatively low-risk within the HSE areas of responsibility are now not subject to proactive inspection at all as a result of the government edict, but may nevertheless be riskier than workplaces falling within the local authority orbit. That is accentuated by the fact that local authorities undertake more inspections than the HSE—nearly 200,000 to the some 33,000 of the HSE—although the latter is of course to reduce.
With greater emphasis on HSE responsibilities and engagement, the primary authority route would be one means of improving the situation, as this probing amendment suggests. However, the professor has a more radical proposition, which is to have a single body directing health and safety across all workplaces, and that this responsibility should pass to the HSE. Can the Minister offer a government view on that proposition?
Amendment 28ZDD touches on the extent to which local authorities may exercise their inspection functions outside the primary authority plan and co-operate in providing feedback. Clause 60 makes following the plan mandatory unless prior written permission has been given. The LGA argument is that this mandate is unnecessary and that encouragement to co-operate will increase the effectiveness of inspection plans. We will hear more of this in a moment.
Our amendment is an attempt—perhaps not a very refined one—to find a middle way. Can the Minister outline circumstances in which the Government consider it reasonable for a local authority to seek and be granted an easement from the inspection plan provided by the primary authority? The impact assessment states that 5% of primary authorities currently use inspection plans, which is a surprisingly low percentage. What are the Government’s estimates of the likely increase in this percentage in the period ahead? I beg to move.
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, listening to the Minister, I felt rather sad that I was going to stand up and say what I intend to say. It is because these primary authority partnerships are such a good thing and have not been around very long that I want to oppose Clause 60 being part of the Bill.
I spoke briefly about this at Second Reading to say exactly that; that they need to be encouraged and that they should not be overturned, through this Bill, by central government when they intervene in local partnerships by directing councils to follow inspection plans. I declare an interest as a vice-president of the Local Government Association and I speak in that capacity. In these difficult times, we know that councils use a wide range of tools to ensure that businesses receive the tailored support that they need. The primary authority is one of the key tools that councils can use when they want to provide individual businesses with tailored support, and when they want to reduce red tape, promote consistent advice from councils and ensure that the limited enforcement resource is risk-based and focused on priorities. I would like to see the removal of this clause, which would make it compulsory for enforcing authorities to abide by the content of inspection plans, which I know is the opposite of what the Minister was saying.
The LGA—I declare an interest—recognises the important role that inspection plans can have in informing enforcement activity but councils are already required by law to have regard to these plans. There are many examples of inspection plans being used to inform the work of councils with companies that have multiple business outlets. Primary authority has only been running since 2009 and has only very recently gained a critical mass of business involvement. It is therefore far too early to identify more than initial findings about the scheme and certainly too early to make wholesale legislative changes. In fact, the evaluation of primary authority involved discussions with only 24 businesses and there are only 11 inspection plans in place.
Furthermore, the evaluation showed that of those councils that had used inspection plans, fewer than 50% found that they enabled a more targeted inspection. It is therefore simply not necessary for central government to intervene in these local partnerships by directing councillors to follow inspection plans. Central direction will reduce flexibility and innovation at a local level. More than that, it will introduce a layer of bureaucracy for both primary authorities and enforcing authorities that fails to accommodate local circumstances and the judgment of competent enforcement officers.
This step also contradicts the Government’s commitment to reduce red tape for councils. It might mean many more delays, in spite of what the Minister suggested. It is an unnecessary use of legislation. I know that the Local Government Association would be happy to discuss opportunities for increasing awareness of inspection plans and how they can be used to achieve more focused and targeted inspections, which would help to achieve the intended outcome without tying councils in unnecessary red tape.
My Lords, I look forward to the Minister’s response. I am bound to say to the noble Baroness, with whom I normally agree wholeheartedly, that I remain unconvinced of the case that has been made. There is an easement for local authorities that want to go down a different route to that provided for in the Bill. As the Minister said in response to my previous amendment, local authorities are free to react to emergency situations or local complaints should they arise. The inspection plans apply only to routine and proactive inspections. I wait to hear the Minister’s response, but this is not a proposition with which we can align ourselves.
My Lords, I will also try to reassure the noble Baroness, Lady Greengross. Under the new governance arrangements that exist for the primary authority scheme with the Better Regulation Delivery Office, there is significant representation from local government on that governance body. I therefore hope that she will be reassured that there will be considerable discussion between the Better Regulation Delivery Office and local government on how the scheme will be implemented.
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 welcome this, and ask the Minister to carry back the message that it is extremely valuable for people to listen to the advice given by committees. He may be involved in the forthcoming Bill which is entirely incorrectly called the Growth and Infrastructure Bill, in which there are some very uncooked suggestions. It would be of great help to the Committee were he to give an assurance that he will do his best to make sure that the Government listen with the same care to some of the suggestions that come from other committees as they appear to have done on this occasion in listening to the specialist committee that has advised this particular action.
My Lords, I added my name in support of my noble friend’s proposition that Clause 61 should not stand part of the Bill. Notwithstanding the Government’s amendments, which have removed what the Delegated Powers and Regulatory Reform Committee described as a power so far-reaching in its effects as to be inappropriate, what remains is a significant and unacceptable change in the law. It overturns what has been in place since 1898 as a result of the landmark decision Groves v Lord Wimborne. It will radically change the way that injured workers can claim compensation from their employers.
The clause was slipped into the Bill on Report in another place without prior consultation. The Government have claimed that it was the recommendation of Professor Ragnar Löfstedt in his independent review of health and safety legislation. But as my noble friend Lady Turner said, his report stated:
“I recommend that regulatory provisions that impose strict liability should be reviewed by June 2013 and either qualified with ‘reasonably practicable’ where strict liability is not absolutely necessary or amended to prevent civil liability”.
I have spoken with the professor, a distinguished academic, directly about this and he told me, as he would tell others, that his report speaks for itself on this matter. He recommended a review; he did not recommend what is included in Clause 61.
We have received a number of representations from authoritative bodies: the Personal Injuries Bar Association, the Association of Personal Injury Lawyers, the Bar Council, the Law Society, the Scottish TUC, the TUC, Thompsons Solicitors, UNISON and the NUT, to name but a few. They all have the same consistent message about the impact of this clause and the deep concerns it engenders.
The current position is clear. Regulations issued under the Health and Safety at Work etc. Act 1974 contain the vast majority of duties that the law imposes on employers to create and maintain safe workplaces. Some of these—a minority—impose a strict liability on employers, others a less strict liability. In the latter case, an employer will not be held to be in breach of a statutory duty if an accident could not have been foreseen or it was not reasonably practical to avoid it. Those situations fall outside strict liability. However, if a breach of duty is established, an employee is entitled to claim compensation.
Where strict liability applies, the employer is liable for injury caused without proof of fault or failure. As the Personal Injuries Bar Association points out, strict liability applies, for example, to the Provision and Use of Work Equipment Regulations. It is justified because the employee has no control over the selection, buying or maintaining of equipment, so the employer who provides it takes the risk if the equipment injures somebody and is defective. If it is not the employer in those circumstances, who will bear that risk, and where is the fairness if it is the employee? There is a separate issue of the employer being prosecuted by the HSE for committing a criminal offence although such prosecutions are few and far between.
However, Clause 61 does not deal just with strict liability. If enacted, it would remove all the opportunities for an injured employee to seek compensation from an employer for breach of statutory duty. Employers will no longer be liable in the civil courts for the offence of a breach of health and safety at work regulations, so, as my noble friend Lady Turner said, the only remedy available to the injured employee would be to prove that the employer was negligent. We are advised that this situation arises because Clause 61 would reverse the presumption in Section 47 of the Health and Safety at Work Act, with the consequence that no health and safety regulation would impose civil liability unless express provision was made for them to do so. The regulations carry no such provisions and, unless the Minister can tell us otherwise, there are no plans to introduce any. Will the Minister confirm that there are no such plans?
Will the Minister also confirm that Clause 61 therefore goes considerably further than the recommendation in the Löfstedt report, the most far-reaching consequence of which, and one which we could not support, would be the removal of strict liability from those regulations to which it applies?
Indeed, the impact assessment shows the Government declined to follow the recommendations of Löfstedt on the grounds that identifying strict liability duties is complex and would require amending a large number of regulations. However, the Personal Injuries Bar Association and others disagree with this and make clear that instances of strict liability are limited and it is imposed only where it is necessary to do so. Therefore, the Government’s justification for this draconian change is spurious. Can the Minister tell us how many regulations are considered subject to strict liability? Will he explain why the Government have chosen to overturn this long-established position and to do so without prior consultation? Why is it considered that to transfer the risk in no-fault situations from employers— more accurately, the providers of employer liability insurance—to employees, their families and/or the state is justified?
Clause 61 will also mean that the route to justice and compensation where the employer is culpable is far less certain. Because an injured worker’s course of action for breach of statutory duty is removed, the available remedy, as my noble friend has said, is to seek to prove negligence. However, the reality is that negligence and breach of statutory duty are not equivalent avenues to justice and compensation.
Indeed, the Government’s own impact assessment identifies that negligence is a more nebulous concept and more difficult to prove, with the burden of proof switching to the employee. The PIBA briefing on this matter explains this in some detail:
“In order to establish liability for negligence at common law, an injured person must establish: … The existence of a duty of care … The scope of the duty … Breach of the duty … That the breach caused injury … That the resulting injury was reasonably foreseeable”.
These are nebulous concepts indeed, to which even the Government refer in their evidence base.
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.