Health and Safety (Offences) Bill
Keith Hill (Streatham, Labour)
Before going on to make detailed remarks about the Bill, may I say that I am almost speechless with pleasure at the thought of serving under your chairmanship, Mr. Pope? I retain my original awe at the concept and appearance of Chairmen of Committees from those days in 1992 when we entered Parliament together, and I am certain that you will preside over our deliberations with magisterial impartiality, notwithstanding the fact that you are one of my oldest and closest friends in the House of Commons.
Clause 1 is by far the most important of the three clauses in this short Bill, because it brings in schedule 1, as well as schedules 2 and 3, which replace the penalty provisions of section 33(1A) to (4) of the Health and Safety at Work etc. Act 1974, and also sets out the mode of trial and maximum penalties for health and safety offences listed in section 33(1)(a) to (o) and for offences under existing statutory provisions where no other penalty is specified.
Perhaps I might take this opportunity to set out how the Bill changes the present arrangements, and the background to the changes. I shall also say a few words on the higher fines proposed in new clause 1. The hon. Member for South-West Bedfordshire may wish to raise some wider issues in respect of the proposed penal regime, and I shall, of course, be happy to respond to his remarks.
Three changes to the present arrangements are set out in the Bill. First, the maximum fine that may be imposed by the lower courts is raised to £20,000 for most offences. Secondly, imprisonment becomes an option for most health and safety offences in both the lower and the higher courts. Thirdly, two further offences become triable in either the lower or the higher courts.
The Bill increases the sanctions available for offences under the 1974 Act. The call for increased sentencing under health and safety at work legislation has two origins. Over the years, there have been repeated expressions of frustration by the courts at their inability to impose custodial sentences for health and safety offences. Secondly, wide consensus has developed among all interested parties—stakeholders, as they are now known—that tougher sentences are required.
That consensus emerged from 1999 to 2000 in the consultations leading up to the publication in June 2000 of the “Revitalising health and safety” strategy statement by the former Department of the Environment, Transport and the Regions. Paragraph XIX of annexe A to the document states:
“The question of what penalties should be faced by those who breach health and safety law received the highest number of responses. The overwhelming message was that the current level of penalties is inadequate (only 7 per cent. considered the current system to be satisfactory).”
Indeed, paragraph 59 in the main part of the strategy statement announces a measure with proposals for higher and lower court fines and the wider availability of imprisonment as the Government’s response to the consultation.
That measure has been introduced five times in different forms. Naturally I am hoping that this will be fifth time lucky. Clearly, the Bill is supported by the Government, and by the Health and Safety Commission and by the Health and Safety Executive, both of which have maintained their belief in new or enhanced sanctions over a period of years. More recently, the Bill’s purposes of toughening up the sanctions available under legislation has received support from two reports prepared for the Government: the Hampton report entitled “Reducing administrative burdens: effective inspection and enforcement”, which was published in March 2005; and the successor Macrory report entitled “Regulatory Justice: Making Sanctions Effective”, which was published in November 2006. There has remained wide acceptance of the case for tough penalties.
I acknowledge that both the Engineering Employers Federation—the manufacturers’ organisation—and the CBI have reservations about the custodial aspects of the Bill, but I detect a fairly wide measure of support for its principles. In its note on the Bill, the EEF states that its members
“support the principle of serious penalties for serious offences”,
and the CBI note states that it
“supports the principle behind this Bill to bring penalties for breaches of specific duties to safeguard health and safety in line with general duties, and to bring the penalty framework for health and safety offences in line with other offences.”
I am grateful for that support. The CBI is right on both counts. One effect of the Bill will be to bring the maximum fines under the health and safety legislation into line with those already available under comparable regulatory legislation—for example, environmental and food safety legislation. A second effect will be to increase the maximum fine in the lower courts for specific breaches of regulations from £5,000 to £20,000, which is the level available for breaches of general duties under sections 2 to 6 of the Act and on the reasonable grounds that such breaches may be just as serious as breaches of general duties.
Let me make a further point about the reasonableness of the provisions. The maximum fine of £20,000 does not go beyond the limit set as long ago as 1992, under the Offshore Safety Act 1992. In addition, the new maximum of £20,000 is not sought for all offences—specifically not those committed by individuals, which will continue to be subject to the maximum in the standard scale of charges. Let me also point out that, while the Bill raises the fines imposable in the lower courts for most health and safety offences, there are no changes in the higher court fine, which is unlimited.
The purpose of the higher fines is more effective deterrence. As Philip Hampton recognises in his report, to deter irresponsible behaviour and to encourage compliance with the law, penalties need to be high enough to eliminate the gain from breaking the law. He states the general position thus:
“Illegal operators have incentives to undercut honest businesses, partly because penalties are low absolutely, but more worryingly because penalties imposed often do not reflect the commercial advantage a business has gained from non-compliance.”
Philip Hampton has no doubt about the inadequacy of current penalties under the Health and Safety at Work etc. Act 1974:
“In 2003-04, the Health and Safety Executive prosecuted 1,756 cases, with an average fine on conviction of £4,036 in magistrates’ courts, and £33,036 in Crown Courts. The deterrent effect of such fines is likely to be low. For any company other than the smallest, a £5,000 fine is likely to be an insignificant sum.”
That is why recommendation 6 of the Hampton report states that maximum fines in the magistrates courts should be increased and, under recommendation 7, fine levels should take account of the economic benefit gained, which is what we are doing under the Bill.
It is in the context of the expectation of higher fines and more effective deterrence that I turn to new clause 1 and proposed new section 33A(1) of the 1974 Act. Although I expect the courts to impose higher fines generally as a result of the Bill, I would not expect them to be so high as to ruin an offending company. However, I have no doubt that, in some cases, the risks created and the injury or damage to health will be so great as to justify such a course of action, but that will be rare.
As for the financial assets and income of the person or employer concerned, the consultation paper on the sentencing guidelines for the Corporate Manslaughter and Corporate Homicide Act 2007 states:
“It is common practice for an organisation to supply its accounts to the court in order to demonstrate its ability to pay a fine for an offence under the HSWA, as otherwise the court is entitled to assume that the organisation can pay any fine it chooses to impose.”
With regard to an individual, not a company, the court is under a duty to inquire into his or her financial circumstances before fixing the amount of the fine. Moreover, in order to obtain information about the financial circumstances of a defendant who is an individual, the court has the power to make a financial circumstances order, requiring the defendant to give that information to the court. I expect the courts to impose a fine that, in their opinion, reflects the totality of the offence, taking into account all relevant details, including the financial circumstances of the defendant.
With regard to corporate defendants, I expect the approach to be that set out by the Court of Appeal in Regina v. F. Howe & Son (Engineers) Ltd. in 1999:
“The objective of prosecutions for health and safety offences in the workplace is to achieve a safe environment for those who work there and for other members of the public who may be affected. A fine needs to be large enough to bring that message home where the defendant is a company not only to those who manage it, but also to its shareholders.”
The court stated that a fine should not, in general, be so large as to imperil the defendant’s continued trading. However, there might be exceptional circumstances in which a defendant ought not to be in business. The court has to look at the whole sum—fine and cost—that it has ordered the defendant to pay and to consider the impact of that sum. That seems characteristic of the reasonableness and proportionality of the approach adopted in health and safety cases both by the courts and the prosecutors over the years, and I expect it to continue. I hope that I have reassured the hon. Member for South-West Bedfordshire (Andrew Selous), and that he will not press his new clause to a Division.
New clause 1 would insert proposed new section 33A(2) into the 1974 Act. The provision deals with the annual uprating of fines with which I feel an instinctive sympathy, but I cannot support it for two reasons. First, it is about primary legislation about which I obviously cannot make any commitments and, secondly, it is important to recognise that the new higher levels of fine proposed under the Bill represent far more than a simple uprating in line with inflation. They represent a statement by Parliament that we are now ready to see a step change in the direction of tougher enforcement in health and safety offences, as a simple uprating in line with inflation would put the maximum fine imposable by the lower court at £6,500. The Bill will increase it to £20,000, which is a qualitative as well as a quantitative change. It is in line with the strong consensus in favour of tougher sanctions represented by earlier consultation on “Revitalising health and safety” and reflected subsequently in the Hampton and Macrory reports.