Committee

Deregulation Bill – in the House of Lords at 3:17 pm on 21st October 2014.

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Relevant documents: 4th Report from the Constitution Committee, 14th Report (Session 2013-14) from the Joint Committee on Human Rights and 5th Report from the Delegated Powers Committee

Clause 1: Health and safety at work: general duty of self-employed persons

Amendment 1

Moved by Lord Wallace of Saltaire

1: Clause 1, page 1, line 17, at end insert—

“( ) In section 82 (general provisions as to interpretation and regulations)—

(a) in subsection (3)(b) for “subsection (3A) or (4)” substitute “subsection (3A), (3B) or (4)”;

(b) after subsection (3A) insert—

“(3B) Regulations under section 3(2) shall not be made unless a draft has been laid before and approved by resolution of each House of Parliament.””

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip) 3:19 pm, 21st October 2014

My Lords, perhaps I should start by saying that the point which has just been raised by the noble Baroness, Lady McIntosh of Hudnall, will be dealt with later on today, so we will return to that question.

The purpose of Clause 1 is to remove the requirements of Section 3(2) of the Health and Safety at Work etc. Act 1974 from self-employed persons except those on a prescribed list of activities. The effect of Clause 1 will be to exempt self-employed persons from the requirements of Section 3(2), except those conducting undertakings prescribed by the Secretary of State in regulations.

As things stand, Section 3(2) imposes a duty on every self-employed person to protect themselves, and others, from risks to their health and safety, regardless of the type of activity they are undertaking. This means that duties are currently imposed on self-employed persons who undertake activities with little or no risk of harm to themselves and others. For example, a dressmaker, accountant or academic conducting commissioned research, as I used to do, working at home currently has duties under this section.

This proposal emanates from an independent review of health and safety legislation undertaken by Professor Ragnar Löfstedt in 2011. He recommended that self-employed persons be exempt from health and safety law where their work activities pose no potential risk of harm to others. One of the cases for doing so, he said, is so that Britain follows a similar approach to other EU countries—a comparison that may be welcome to some and possibly not welcome to others. The Government accepted this recommendation and a clause was included in the draft deregulation Bill.

In 2013, the Bill was subject to scrutiny by a pre-legislative scrutiny Joint Committee chaired by the noble Lord, Lord Rooker. Evidence presented by interested parties suggested that the clause, as originally drafted, could be confusing for self-employed persons to assess whether the law applied to them or not. The clause was therefore amended in the light of this evidence to make it clearer to the self-employed when the law will apply to them and when they will be exempt.

As a result of the change, only those self-employed persons conducting an undertaking prescribed by the Secretary of State in regulations will continue to have duties under Section 3(2). Undertakings will be prescribed if one of the following four criteria is met: first, there are high numbers of self-employed in a particular industry and high rates of injuries and/or fatalities—for example, in agriculture; secondly, there is a significant risk to members of the public—for example, in fairgrounds; thirdly, there is the potential for mass fatalities—for example, in the use of explosives or other dangerous equipment; fourthly, there is a European obligation to retain the general duty on self-employed persons—for example, in construction.

I hope that by now all noble Lords will have had an opportunity to consider a draft of the prescribing regulations, which has been produced in light of these four criteria. I am sure we can all agree that those self-employed undertaking work in the building industry should remain within the scope of health and safety law. Under the draft regulations, noble Lords will see that this will indeed continue to be the case. Builders, for example, will not be exempt under this proposal. Similarly, gas fitters and boiler engineers for obvious reasons will not be exempt. The risks posed when working with gas are recognised to be high and so the duties owed by a self-employed person who undertakes these activities will be maintained.

The draft set of regulations for the prescribed undertakings has been designed to strike a careful balance between the need to free self-employed persons from the perception that health and safety law places unnecessary burdens on them while still providing important protections in the law to those who require them. The Government have also tabled an amendment accepting the recommendation of the Delegated Powers and Regulatory Reform Committee to change the parliamentary procedure for these regulations from negative to affirmative. This will allow Parliament fully to scrutinise the regulations.

To ease transition to the new system and minimise familiarisation costs, the prescribed list relies on existing legal definitions, where possible. The clarity of the definitions in the list of prescribed undertakings in the draft regulations was the subject of an eight-week public consultation during the summer. The responses are being analysed by the HSE and will be published shortly. The draft list is available on the HSE website, and to assist the House, I will place a copy in the Library today. I hope that this will help in our discussions.

Further to aid the transition, the Health and Safety Executive is producing guidance targeted at self-employed persons and others to assist them in understanding the proposed changes to the law. It will also signpost them to existing guidance which explains in practical terms what self-employed persons need to do to comply with the relevant law. There is, for example, extensive guidance made publicly available by the HSE about managing health and safety in construction. This provides additional information about the definition of construction work, which is one of the activities intended to be prescribed. Detailed guidance exists for a majority of the other prescribed activities and, where it does not, the Health and Safety Executive will ensure that additional guidance is produced to support this legislative change. I beg to move Amendment 1 and propose that Clause 1 should stand part of the Bill.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government)

My Lords, I rise to speak to our intention that Clause 1 should not stand part of the Bill. This is grouped with the government amendment and I can say that, should the clause survive, of course we accept that the affirmative procedure should be supported. However, I give notice that, notwithstanding the grouping, we reserve the right to vote separately on the clause stand part debate.

We have a first-class health and safety system in the UK which is respected around the world. At its centre is the Health and Safety at Work etc. Act, now in its 40th year. The system is built around the principle that those who create risks are best placed to manage them, and without being complacent, it is an approach which has hitherto saved countless people from being killed, injured or made ill by work. As we have heard, Section 3 of the Health and Safety at Work Act currently places a duty on all employers and the self-employed to ensure, so far as is reasonably practical, the health and safety of others.

We should therefore be alarmed at what is now being proposed in Clause 1 of the Deregulation Bill, which seeks to exempt millions of the self-employed from health and safety legislation. This move springs from a recommendation made by Professor Ragnar Löfstedt, which was to exempt the self-employed who,

“pose no potential risk of harm to others”.

Such an exemption was proposed notwithstanding that it is generally accepted, including by Professor Löfstedt and the Health and Safety Executive, that the duty on the self-employed in these circumstances is limited, that little would be saved in terms of cost and time, and indeed in precautions undertaken, if such an exemption was introduced.

The professor also advanced the argument, as we have heard, that the exemption would help progress perceptions of a heavy-handed approach to health and safety for the self-employed, although scant evidence was provided to support the contention that this is a real problem. Indeed, the Engineering Employers’ Federation has refuted the view that self-employed people see health and safety as a burden and that they feel threatened by inspections and prosecutions. However, if there are these misapprehensions, surely the right thing to do is to challenge them, as the HSE is doing through its myth-busting panel rather than pare back the limited requirements which actually apply.

It was also proposed that this would bring us into line with Europe. However, international experience is varied, and more than half the countries of the EU include the self-employed in their health and safety legislation. Some that do not have stricter negligence laws which can be applied to those who put others at risk. Any suggestion that the UK’s health and safety system is creating an anti-competitive regime for the self-employed would not seem to be supported by what is happening. Self-employment actually grew by nearly 400,000 in the four years to 2012.

The HSE’s formulation to meet the Löfstedt recommendations was consulted on in 2012 and, despite receiving support from only a minority of consultees, was included in the draft Deregulation Bill which went before the Joint Committee. However, this attempt has proved problematic, with the Government eventually concluding from the pre-legislative scrutiny—rightly, in our view—that it would have been too confusing as to who was exempt and who was not. Given the minimal requirements on the self-employed who pose no risk of harm to others, it would have been logical at this point to hold on to the status quo; that is to say, although Professor Löfstedt arguably had a point, seeking to address it caused more problems than it solved.

However, rather than settle for that, the Government have embarked on pressing a clause which introduces a much wider exemption covering 2 million self-employed people. It turns the Löfstedt recommendation on its head by exempting all the self-employed except those who undertake high-risk activities. The latter, as we have heard, are to be prescribed in regulations. There was no prior consultation on this change of policy. We are told that the outcome of the consultation that has subsequently taken place on the draft regulations will not be available to us until December, when Committee at least will have concluded. Given that we are confronted with such a dramatic change to the legislation, how does the Minister justify this situation?

As we have heard, an undertaking will be prescribed and therefore outside the exemption if there are high numbers of self-employed, a high incidence of fatalities and injury, a significant risk to members of the public, the potential for mass fatalities, and if there are EU obligations. The effect of this, as the TUC points out, is that any self-employed person not covered by the list will have no duties under the Health and Safety at Work etc. Act and cannot be issued with an enforcement notice, regardless of any risk they pose to themselves or to others.

This changed approach is fraught with danger. HSE experts have previously advised that relying wholly on a prescriptive approach to determine exemptions would lead to unacceptable consequences. It will not be easy in all circumstances for the self-employed to know whether or not they are exempt, particularly for those who tend to get their information by informal means. The references in the draft regulations to related regulations are extensive, the descriptions of offending activities are not always clear, and there is a risk that those who control workplaces that include the self-employed will conclude, wrongly, that they have no duty of care to them.

As IOSH contends, the self-employed do not necessarily have a static business model: they may sometimes employ people, sometimes not; they may sometimes work in a high-risk activity, sometimes not. Perhaps the Minister can say whether those working in partnerships will inevitably be outside the exemption, and what thought has been given to the consequences of the sometimes fine line between a joint venture and a partnership. The HSE considers that many made exempt would continue with sensible health and safety precautions because it makes good business sense, but we know that not all will. If allowed, some will cut corners and be careless with the well-being of those around them. Clause 1 will give them licence to do so.

Moving away from the requirement that all have to undertake a risk assessment, however limited, and even if just to determine that they pose no risk of harm to others, runs counter to the fundamental preventive approach to health and safety. Particularly worrying is the HSE’s analysis, which shows that the clause would more than double the number of self-employed who would be exempt, in comparison to Professor Löfstedt’s approach. The HSE reminds us that some of the additional people who are exempt will fall within occupations that have injury rates statistically higher than the average for all occupations, such as motor mechanics, van drivers, HGV drivers, furniture makers and woodworkers, metalworkers, and maintenance fitters. Will the Minister specifically say why the Government consider that these types of activity should be outside health and safety law?

Of course, many more who are above the Löfstedt threshold of posing no potential risk of harm to others would find themselves exempt under these new policy proposals. Can the Minister confirm that this is the case and say why this is also considered to be acceptable? He might say that we could draw the line in another place, but where? The express policy change is to exempt all but those involved in high-risk activities. If it is acceptable to the Government for the self-employed to create some level of risk of harm and be outside the 1974 Act, what alternative criteria would the Minister propose?

Let us contrast all this with the current situation, where the legal duty to ensure that you protect others from harm resulting from work activity falls on all self-employed people as well as employers. There is no confusion, even if the requirements for those who pose no risk of harm are minimal. This has long been accepted as a fair and decent arrangement.

After 40 years of progress, we see the Government unforgivably trying to unravel parts of our health and safety system, so opposition to this clause comes not only from us but the TUC and the EEF, from professional bodies as well as campaigning organisations such as APIL, IOSH, IIRSM, RoSPA and others—all people who know and work with the present system. Frankly, we do not think that the Minister’s heart is in it either, nor should it be. We should resist Clause 1 and strike it from the Bill.

Photo of Lord Stoneham of Droxford Lord Stoneham of Droxford Liberal Democrat 3:30 pm, 21st October 2014

My Lords, my personal position is that we should not bother to amend this aspect of the Health and Safety etc. Act, but I also accept that, although there are arguments on both sides, the chasm of disagreement is not as great as either side might want us to think.

There are certain bêtes noires of our society which are blamed for most of our problems, whereas in reality the positive contributions of those organisations are often greater. One of those is the Health and Safety Executive. The perception of that organisation often gets in the way of reality. The health and safety legislation has assisted huge improvements, as indeed have better management practice and staff involvement to address poor work practice and productivity related to poor safety conditions.

The questioning of the working of the health and safety legislation and the European directives associated with it was probably to be expected from this Conservative-led Government, but Professor Löfstedt may have disappointed many when he said that no radical reform was needed and that the problem was less with regulations and more with the way in which they were interpreted and regulated. However, one feels that he had to say something to come up with a political proposal. He advocated that those self-employed whose work activities pose no threat to others should be excluded, which would help reduce the perception that health and safety is inappropriately applied.

The reality is that there is not much of a burden on the self-employed. That was proved in the Government’s consultation. If you do not believe the Health and Safety Executive, even the mighty Engineering Employers’ Federation, as the noble Lord, Lord McKenzie, told us, supports its view, stating:

“It is a myth to suggest that the self-employed are singled out by the regulatory authorities for inspection. This is not the case nor is there a record of prosecution against the self-employed, except in a few cases where their activities have or could have impacted others adversely”.

If such burdens were so great on the self-employed and on small businesses, how do we account for the huge growth in self-employment and business start-ups under this coalition Government?

There is a problem with excluding general categories of self-employed for whom health and safety is not a burden. You end up making the regulations more complicated and less simplified, which should be the objective of the legislation. The self-employed are going to have to know whether they are excluded. To many, this might mean that understanding the regulations will be even more difficult than it is now, and that we are going to have all sorts of categories, whether it is drivers, removal people, carpenters and all trades people, construction workers, bee-keepers and so on, excluded from this provision in the Deregulation Bill. The general view that this change is not worth the candle is one which I share, but if we are to have it—and I accept that we probably are—we must see the list of exemptions to reassure people that no real harm is going to be done.

Photo of Lord Deben Lord Deben Conservative

My Lords, I declare an interest as the chairman of a company that from time to time gives health and safety advice and as a former Minister for health and safety. I start from the assumption that there is something a bit peculiar about an outside body controlling the way that an individual shall disport himself in his own business—particularly if it is held in his home. That is not unreasonable. More and more people work at home. We are changing the law to make it impossible for people who rent accommodation to be told that they cannot work at home. There are many jobs that people do at home where, frankly, telling someone that they should not stand on an upturned waste-paper basket to get something down from a shelf is an intrusion.

That is my basis, so I do not come to this with any antagonism. There is truth in the feeling that the health and safety regulations have, whether because of their application or because of the perception, stopped a whole lot of activities which it would be better not to have stopped. I also know that many of those who are opposed to the European Union have used this as an excuse to bash the European Union when, of course, almost all of it is our domestic attitudes, and the European Union has adopted British attitudes towards health and safety. I often point out to people that the ease with which the European Union is blamed for things is one of the problems with people’s perception of that very important institution to which we belong and to which I trust that we will fight to ensure that we go on belonging.

However, there are some real problems here that have not been approached. Perhaps I may give some practical experience. Recently, I talked to someone who had been held responsible for an accident in premises which he owned and oversaw by a self-employed person who did something dangerous to himself, but not on his own property but on that of the person concerned. We have to face the odd issue that if we are not very careful, we will have circumstances in which the employee of a firm will be protected and the self-employed will find themselves protected or affected only when they are working somewhere else. Does that mean that a self-employed person who has no responsibility under the Act to protect himself nevertheless has a case against someone else for his own actions, because they happened to be on their premises? That may not seem to be a general activity, but it is a bit more general than some would like. That would bring no benefit to people’s approach to health and safety legislation.

I use that example not because it is the most important, but because it makes me wonder whether, in the speedy time in which the Bill has been discussed, we have thought through all the ramifications. Having been a Minister for health and safety, I have to say that it is a very complex area. Apart from the very real sense that people feel that we have overdone it in many concerns, let us also accept that it has had remarkable success in protecting people, sometimes from themselves.

That brings me to my second point. My noble friend raised the argument of whether, if you have sufficient people exempted from cover, those who are not covered will know whether they are exempted. In other words, there seems to be a real complication about how people get to know whether they should be there or not. That in itself is one of the things that will bring the Act into disrepute. People will say, “I don’t know if I am covered. Perhaps I had better find out—I had better get somebody to tell me”. Frankly, they will find themselves in precisely the position from which the Government are, absolutely rightly, trying to protect them. I have a real issue with the complications which inevitably come if we are dealing with this.

Thirdly, one of the advantages of the health and safety Act has been to bring to people’s attention the danger of doing certain things which they may not know about. Most self-employed people are not experts in health and safety, and they do things that they ought not to do not because they necessarily intend to be unconcerned with their own health and safety but simply because they do not know. The Health and Safety Executive has over the years provided extremely helpful information. If you are subject to the Act, it is a natural relationship between you and the authorities to get the information that you need. I wonder what the position will be if you are not subject to the Act and whether you would be able to access or have the information that you need.

The problem for me is that there are all sorts of things which, frankly, we should never have allowed to go on within the activities of the Health and Safety Executive. People really should be responsible for sensible behaviour and some of the cases are so awful that we should be quite ashamed of not dealing with them. There is the case, for example, of the boys who broke into a site owned by English Heritage. They clearly broke into it after it was closed, by going over the fences. They climbed on to the roof and then bet each other to jump off it. One of them had been personally injured beforehand—he was in fact disabled—and when he did so, he did himself huge harm. English Heritage was advised that it should not defend this case in the courts because it would be likely to lose. Taking that simple example, if you climb over somebody else’s fence when it is clear that you should not be there, then climb on to and jump off the roof, that is your fault. There should be no health and safety grounds whatever in such cases and when dealing with them, the court should say whatever might be a proper version of “B— off”.

There are so many cases which have meant that people are afraid to open their homes or, for example, to offer to open a farm to people to learn about sheep in case one of the children touches the sheep and therefore gets some disease. All these things are serious assaults on the system and we have to be careful not to make our system look ridiculous, for very good reason. I really object when people suggest that everything is well in the health and safety world and that it is only about people’s perceptions. Frankly, it is not only that; the system makes fools of us all very many more times than ought to be so. However, that should not lead us to make further mistakes in our legislation. I am disposed to be happier if people working in their own homes should be given the responsibility of deciding how to work safely, although I object instinctively to the idea that because I am self-employed some busybody from outside should tell me how to write an article at home, whether I should hold my pen in one way or another or what I should do about the possibility of stress-related illnesses. I find that objectionable and I think that many Members of the House on both sides would agree. I just wonder whether this solution does not create more problems than it solves, and whether the Government should not provide rather more time for some exploration of the issues being properly raised in this debate.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench 3:45 pm, 21st October 2014

My Lords, I speak in favour of this clause and the Bill. I need to declare an interest: I chair the Better Regulation Executive, and many of the elements of the Bill have come through the Red Tape Challenge process, which we are partially responsible for. I stress that I am the independent chair of the BRE.

I understand the concerns that have been raised about the perceived dilutions of health and safety standards that this would give the indication of being. In fact, though, the noble Lord, Lord Deben, has mentioned the European Union, and we could be charged with being guilty of gold-plating health and safety because what Professor Löfstedt has recommended here is that we come into line with the rest of the EU. In most member states this is common practice; self-employed people in certain trades are exempt from health and safety legislation. This is bringing us into line with what is common practice in most member states within the EU.

The fear is that high-risk trades are going to find themselves newly exposed, but of course that will not be the case as those trades will not be allowed this exemption, and the Health and Safety Executive will produce guidance if there is some uncertainty among trades about whether or not they need to comply. The idea that somehow or other self-employed people in certain trades being exempt from this legislation means that they are suddenly going to behave irrationally is just not true. Most self-employed people will continue to behave as they behave now, whether or not they are subject to the law. What this does is remove from their lives some bureaucracy and box-ticking exercises that they are subject to now, so they will be alleviated from that burden. The assumption that there is going to be masses of exposure of self-employed people who are then going to suffer serious health and safety accidents is just not the case.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

My Lords, this has been a short debate. I recognise the worries that have been raised. I thank the noble Lord, Lord Curry, for his speech. I emphasise that this is very much about the Red Tape Challenge and removing both real and perceived burdens on businesses. I stress perceived burdens because it is a disincentive to set up a business if you are intending to work on your own if you think that you face a tangle of regulations that it will cost you money, and take you a great deal of time, to work through and understand. The question of perception is therefore not at all unimportant to this Bill. On the other hand, I recognise that much of this is not enforced, let alone inspected, when it comes to people who work on their own, quite often in their own homes, so there are shades of understanding on all sides of the issue.

When I think about the self-employed, I tend to think about people in my profession, academia. I can recall two accidents in academics’ homes that I am aware of, in which bookcases became overloaded with books and collapsed. I regret to have to admit to your Lordships that one of the bookcases in question I had put up several years before; we had then sold the house to another academic and the bookcase very nearly collapsed on him, so in that sense I am perhaps liable. My DIY skills are not as good as they should be.

We recognise that people working in what one has to say are the intellectual trades or in the service industries—accountants, lawyers working at home and so on—on a self-employed basis are not in the business of high risk. All regulation is a question of how much risk one is prepared to accept, how large the risk is and how burdensome regulations will be. That is a constant trade-off that all Governments and Administrations have to consider, and that all courts when asked to review them also have to consider. The question of the balance is very much part of what we are now dealing with.

The noble Lord, Lord McKenzie of Luton, asked about people working in partnerships and whether they are exempt. I can tell him that if they are self-employed within the definition in the Health and Safety at Work Act, they will be exempt unless the activity that they are undertaking is on the proscribed list. The definition of “self-employed” is not altered by this change. The noble Lord quoted paragraph 90 of the HSE review on this. I had indeed looked at paragraph 90, and what is said in paragraphs 91, 92 and 93 modifies what is said in paragraph 90, to the effect that we should not expect adverse health and safety impacts for the workers themselves and that behaviour is not likely to change due to the exemption. Again, we are dealing with degrees rather than sharp distinctions, one for another, and with perceptions as well as realities.

To introduce some numbers, as has been stated in the debate the number of people who are self-employed has grown considerably over the last 20 years, particularly over the last 10 years. On figures for accidents and fatalities, in the years 1992-93 there was an average of 81 fatalities among the self-employed per year; in 2012-13, there was an average of 51 fatalities. Many of these accidents involved electrical failures, or people who are electrocuted in the home or whatever it may be, as well as anything that may involve anyone else who had visited them.

I will ensure that I have answered all the other questions. The noble Lord, Lord Stoneham, and my noble friend Lord Deben asked whether we have anything specific about premises. This proposal is specific, as I mentioned in moving it, to Section 3(2) of the Health and Safety at Work Act. Self-employed people will continue to have duties under Section 4 of the Act, which places a duty on those who provide non-domestic premises in a workplace, such as landlords. The duties that the self-employed person will have more generally will depend on whether the self-employed person carries out the activities on the proscribed list.

Photo of Lord Deben Lord Deben Conservative

My question was not just about whether they had duties, but whether the same responsibilities for the self-employed person who was exempt would be borne by the owner of the premises upon which they were working.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

My Lords, I will have to write to the noble Lord about that specific question; I have noted it.

Part of what we are seeing in the rise of self-employment is that the number of people working in their own homes is rising as well; computerisation and all of the information technology developments make that much easier than it was 20 years ago. The noble Lord, Lord Deben, has remarked that inspectors could indeed come around and make sure that they have got their computer screens at the right angle and that they are using the right sort of chair. All of these can indeed be regarded as mild risks to those who are engaged in the activity. Again, however, in the balance between risk and regulation, that seems an acceptable risk to the Government, and one would wish to maintain the degree of independence and autonomy that one could have.

Photo of Lord Greaves Lord Greaves Liberal Democrat

I was very much taken by my noble friend’s example of somebody who is self-employed being hit by a huge pile of books when a bookcase collapsed; I thought, “Yes, I have been there”. Can my noble friend tell me who is responsible from a health and safety point of view if an employed person is working from home, as so many people now do, and there is an accident with equipment for which the employed person is entirely responsible?

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip) 4:00 pm, 21st October 2014

If that person is not self-employed, but working in paid employment with equipment provided by the employer, we are in different circumstances from those covered by this clause. If necessary I will write to the noble Lord to clarify that further. However, where a non-self-employed person is working from home while still carrying on their employment is a different circumstance.

The noble Lord, Lord McKenzie of Luton, touched on the list of exemptions and what areas are covered. The regulations will of course be discussed further—the HSE is currently discussing the draft list—so we may come to a slightly different conclusion at the end. I merely wish to point out that the actions of independent van drivers, for example, are covered by a whole range of other regulations. The question of whether we should duplicate regulations and restrictions is also one of those which the Red Tape Challenge wishes to address. I hope that I have managed to answer all the questions that were raised.

Photo of Lord Deben Lord Deben Conservative

I raised the question of information. Although a large number of individuals are exempt—I quite agree with that—they would still perhaps benefit from knowing about these things. How will that connection be made?

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

My Lords, I suspect that most young, self-employed people get their information about these things off the computer or iPad. I hesitate to suggest that inspectors should visit them in their homes to check that they are doing things correctly. That suggests a level of state intervention in personal lives and activities that I hope the noble Lord would be strongly opposed to and perhaps the Labour Front Bench would not wish to propose. As I have stressed before, we are talking about the balance between acceptable risk and necessary regulation, and about the balance between the burden of regulation and the perception by people who wish to set up their own businesses or work on their own of the amount of regulation they face and the potential risks to themselves and others who may visit them.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government)

As we are in Committee, I will make a few comments. On the issue of perception not being irrelevant, surely the way to tackle perceptions or misperceptions is, for example, to do what the HSE does through its myth-busting arrangements and panels to make sure that there is proper information and education. To pander to misconceptions and weaken health and safety protections is completely the wrong way to go. I say to the noble Lord, Lord Curry, that we are not just talking about perceptions here. In this clause we are talking about actual diminutions in health and safety protections. This goes a long way beyond what Professor Löfstedt recommended. He said that we should change the rules for those self-employed who pose no risk of harm to others. In this clause we are way beyond that. The Minister said that whether the law is there or not people will still act sensibly. Some will and some will not. However, he has not effectively answered the point: why should woodworkers, furniture makers, metalworkers and maintenance fitters, for example, be outside health and safety provisions both as regards their own protections and their responsibility to others?

I fundamentally agree with the noble Lord, Lord Deben, who said that the risk of all that is that it will create greater complications than anything that it solves. The noble Lord, Lord Stoneham, said—or I took him to say—that we should not proceed with this until we know what the detailed regulations are, and it appears that we will not know those for some time. What has not been answered effectively is why, having originally accepted Professor Löfstedt’s recommendations, the Government now wish to go way beyond that. That is what they are doing with this clause: they are weakening health and safety protections which have stood the test of time for 40 years.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

Perhaps I may respond to the points made by the noble Lord, Lord McKenzie. I was in contact with Professor Löfstedt in the past week. He has seen the wording of the Bill and appears to be very content with it. Perhaps I may respond to the comments of the noble Lord, Lord Deben. The Health and Safety Executive will carry the information that the noble Lord requested, so any self-employed business could very soon find out from the executive whether or not it is exempt.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government)

With great respect, I do not think that that is Professor Löfstedt’s position. He circulated his original advice; we know what that is and why it could not be implemented.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

I hesitate to suggest that we should call Professor Löfstedt to the Bar to explain what he may or may not have said; he is in Sweden at present and we will have to wait until he comes back. The decision that the Government took to produce a list of activities rather than occupations that would be covered by health and safety regulations, leaving others outside, was in order to provide greater clarity. I stress that it is intended to cover activities conducted by self-employed persons rather than being occupation-based.

The self-employed person in any profession who conducts one or more of these activities will remain within the scope of the law. Where a self-employed person falls exempt under this proposal, it is considered that other enforcing authorities would be better placed to deal with transgressions. Many other laws and regulations apply to these activities. There are also other means of redress available in civil law to those who suffer harm as a result of a self-employed person’s activities, and in some circumstances in criminal law: for example, gross negligence.

I also remind noble Lords that we tabled Amendment 1 to ensure that the list, which is now available in draft and is, I hope, in the Library, will be subject to parliamentary scrutiny under the affirmative procedure —so we will be able to return at that point to make sure that we have the boundary that we are now arguing about right. As drafted, it was subject to the negative procedure, but now there will be a further opportunity in Parliament to debate the exact list of high-risk activities before it comes into effect.

Amendment 1 agreed.

Division on whether Clause 1, as amended, should stand part of the Bill.

Contents 253; Not-Contents 175.

Clause 1, as amended, agreed.

Division number 1 Deregulation Bill — Committee

Aye: 251 Members of the House of Lords

No: 173 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Clause 2: Removal of employment tribunals’ power to make wider recommendations

Debate on whether Clause 2 should stand part of the Bill.

Photo of Lord Rooker Lord Rooker Labour 4:24 pm, 21st October 2014

My Lords, I chaired the Joint Committee, and we produced a report that mentioned Clause 2 only at the end, in the paragraph on “Wider concerns”. However, that report was published a year ago and things have moved on a little. What I would ask noble Lords to think about while we consider this clause on employment tribunals is: who does it affect? It affects only employers who have broken the law. I repeat: it affects only employers who have broken the law. So this is a completely different debate to the one we have just had on Clause 1. We have a specific target—those employers who have broken discrimination law. They are the only people affected by Clause 2. We therefore ought to look at it in that context.

We had a lot of evidence on Clause 2. I did not count the amount of time that was spent on it, but it was less than on some of the other issues. We noted the wider concern from opposing forces, if you like, at paragraph 190 of the report. There was an absence of evidence in favour of the clause from some groups, whereas the other side claimed the power in the clause had rarely been used since being enacted three years ago and that therefore it should go. I do not think rare use is an excuse or should be used as a reason of itself to abolish a power that was put in by Parliament only three years ago. That reason is not sufficient. Not many companies have been affected by it. In their response to the Joint Committee’s report, the Government said, at paragraph 103:

“around 28 Tribunal cases have been given wider recommendations”.

The emerging pattern was that 70% of the recommendations focused around training and management. It is unlikely that that pattern is going to change.

The Government’s response was published in January this year—a long time ago now. However, in order to assess the effectiveness of the power, the Government Equalities Office, which I think is buried deep in the Home Office, wrote in autumn 2013 to 27 of the lawbreaking employers who had received wider recommendations at that point. The Government Equalities Office asked whether those employers had taken forward those recommendations and how much it had cost them to do so. Eight bothered to reply, six from private and civil sector employers. The Government’s response states that:

“All the employers who responded had implemented the wider recommendation”— that is, those lawbreaking employers found the extra recommendations quite useful to prevent further discrimination, which would cause them more problems if they were found guilty of discrimination again. They had taken the sensible course of doing something about the wider recommendations, at an average cost to business of around £2,000.

The Government Equalities Office—bless it—obviously thought that was sufficient. It could not even be bothered to chase up those who did not answer. That beggars belief: it did not bother to chase up those other 19 lawbreaking employers that could not be bothered to tell us what they had done. Thank heaven, therefore, for the Equality and Human Rights Commission. This is the central point that I want to make. I want to ask the Minister to take this away and think about it again. I freely admit that there is a justified case either way, but my view is that the decision here ought to be based on the evidence. The Joint Committee published its evidence by 16 December last year, as required by Parliament. The Government responded in January and the Bill has been through the other place.

However, the Equality and Human Rights Commission decided—bless it—to have a look at what had happened since the Government’s report was published, after it had already given evidence to the Joint Committee. It has gone away and had a look. It reviewed more than 400 employment tribunal judgments received from the employment tribunal between December 2012 and September 2014—note that: September 2014—long after the Government’s response to the Joint Committee.

I shall not go through the whole EHRC report, which many noble Lords will have received, but the criticisms of the wider recommendations power, as expressed by government and business, can be summarised as follows. One criticism was: “They impose a burden”—I think that is very polite—“on employers” who have broken the law. I repeat: all the employers affected have broken the law; they have all been found guilty of discrimination.

Another criticism was:

“The power is little used”.

Well, there is a bit of an issue regarding the power being little used. As I understand it, having looked at the EHRC’s note,

“16 per cent of claimants in discrimination claims were still working for the employer against whom they made their claim”.

That means that 84% never get the chance to benefit from the wider recommendations because they are no longer with their employer. There is a bit of a mismatch there.

However, the main point is covered in the EHRC’s conclusion. The example that the Equality and Human Rights Commission gives us is a comparison with the equal pay breach. I fully accept that this clause does not apply to discrimination involving equal pay breaches, but the commission’s report refers to the Government’s statement that in such cases:

“Employers will be required to fully consider their pay policies and structures”— that is, after someone had been found guilty of discrimination—

“and draw up an action plan to rectify any discriminatory pay differences that may exist. This will result in fewer future breaches and will consequently reduce the number of equal pay claims brought against employers”.

That is exactly the rationale that should be applied to other discrimination cases. Basically, all we are asking with regard to the wider recommendations is that these lawbreaking employers should be protected from themselves by encouraging them, when it is appropriate to do so, to go wider than the individual who has won a case for discrimination.

I shall not go through the whole of the commission’s report, but at the end it recommends:

“The power to make wider recommendations is an effective way of preventing unlawful discrimination from occurring and helping employers to comply with their duties to treat their employees fairly”.

These are employers who have broken the law—let us make that absolutely clear. We are trying to help so that this situation does not happen again. We are helping both the employers and the employees. The commission concludes:

“The case for its abolition has not been made”.

The Minister is not in charge of this Bill; Oliver Letwin is, and they are as different as chalk and cheese. Let us be clear about that, so that we know what we are talking about. We are talking to Oliver and we say to him, “What we really want you to do is to think about this again, because you are protecting and giving an easy ride to lawbreaking employers with this clause”.

As I said at Second Reading, I agree with the thrust of the Bill; I do not have a problem with a great deal of it and I support what the Government are trying to do. However, since the Joint Committee reported and the Government produced their response to the Joint Committee, some fresh evidence and thinking has come from the Equality and Human Rights Commission. It is far more up to date than what the Government did through the Government Equalities Office and the Home Office. That was trivial—they never chased anybody up. So we have some fresh and better evidence that shows that it might be a mistake to enact this clause.

I am asking the Minister to think about this following the debate. I ask him to go back and talk to Oliver and say, “I think we ought to have another think about this on the basis of the evidence that we’ve now got but which we didn’t have when we, the Government, responded to the Joint Committee”. I end by expressing my opposition to the clause standing part of the Bill.

Photo of Lord Sharkey Lord Sharkey Liberal Democrat 4:30 pm, 21st October 2014

My Lords, as the noble Lord, Lord Rooker, said, the Joint Committee on the draft Bill, of which I was a member, received a large amount of evidence on this clause. The effect of Clause 2 is to amend the Equality Act 2010 to remove the power of employment tribunals to make recommendations to employers in cases where there has been a finding of unlawful discrimination, harassment or victimisation, and where the successful claimant no longer works for the company.

In such cases, the claimant has redress. His former fellow workers may still be stuck with the conditions that led to the discrimination, harassment or victimisation of their former colleague, and that is in most cases. In 2013, only 16% of claimants in discrimination cases were still working for the employers against whom they made the claim. That means that in 84% of discrimination cases, the tribunal would no longer have the power to make recommendations to employers to take steps to improve their employment practices so as to avoid similar discrimination against their other employees.

Broadly speaking, evidence from business interests supported the clause and other groups opposed it. Business spoke in support of Clause 2, chiefly because it believed the wider recommendations to be beyond the information and expertise of the panel or that it was unnecessary because,

“the reputational risk of a wider recommendation is something an employer would take into account when making a decision whether or not to settle out of court”,

which is slightly grubby reasoning. Those who opposed the clause did so chiefly on the grounds that the system had been in operation for too short a time to provide any clear evidence about its merit or otherwise. The JCHR was opposed to the clause as was, perhaps not surprisingly, the EHRC.

At the time of our report, as the noble Lord, Lord Rooker, said, there have been 28 such tribunal wider recommendations and I understand that in 2013 there was a total of 30. That may seem like a small number in absolute terms, but it represents one in every 12 cases in 2013 where these kinds of recommendations were made.

In their response to the Joint Committee’s report on Clause 2, the Government held to the view that the clause should remain and they disagreed that the removal of the tribunal’s power of recommendations was either unnecessary or punitive. The arguments that they advanced were first that there was a clear pattern visible in the existing recommendations; namely that they focused on training for management or updating the diversity policy, which is hardly a surprise. They asserted in a magnificently unproven and probably unprovable way that it is unlikely that this pattern will change going forward or that much more could be learnt about the use of the power by reviewing it and allowing it to run on for several more years. That is of course simply a non-evidenced assertion. More importantly, there is no evidence that it can be true. The sample is simply too small.

The Government’s second argument was based, as the noble Lord, Lord Rooker, pointed out, on a survey of employers—all 28, presumably, who then received wider recommendations because of breaking the law. Only eight responded. Six of these were from the private sector and all six had implemented the wider recommendations with an average cost of £2,000. The Government were silent about the two public sector respondents. I am at a loss to understand why the Government think that this is an argument in favour of removing the power to make wider recommendations. The response level is so low that it probably proves nothing at all, but if it proves anything then surely it shows the merit of these recommendations. It shows why the power to make them should be retained.

The Minister and his team have been helpful in providing additional briefing on the clauses that we will debate today as a Committee of the whole House. It included briefing on Clause 2 and I thank the Minister and his team for that. In a briefing note on the clause, the Government make four points in defence of the removal of the power to make wider recommendations. First, there are better and less burdensome ways to achieve the aim of helping employers comply with anti-discrimination. The response points to government-led workshops although it does not say how many and says that these workshops generated positive feedback from small business owners to the simple compliance message of “Do not discriminate”. That is not hard evidence, and not really evidence of any kind. How many workshops were there? How many small businesses? What positive feedback was there on agreement with the message that you should not discriminate? What follow-up was there to see if the workshops produced behavioural change?

The Government also point to the fact, which I have noted already, that employers think that the power is not needed. That is surely not a surprise to anyone. Nor does it amount on its own to a reason for abolition.

The Government’s third argument in defence of Clause 2 is essentially that the power added little and was not necessary. They go on to repeat that the cost of compliance with wider recommendations averaged £2,000. Presumably this is based on the six companies that actually replied to the Government. If that argues for anything at all, it is for retaining the power, if that is all it costs to put right discriminatory practices in a company.

Finally, the Government point out that any wider recommendations are enforceable under the 2010 Act and are therefore of limited effect. In their briefing paper, the Government go on to say about the removal of the power to make wider recommendations that it will not stop tribunals from making observations in their judgments about how an employer might improve their practice to avoid breaching the Equality Act in the future. In other words, removing Clause 2 means that tribunals will not be able to make unenforceable recommendations any longer, but they will still be able to make unenforceable observations with exactly the same effect. Let me be clear about this: we are debating the removal of a power to make unenforceable recommendations and leaving in place the power to make exactly the same comments as unenforceable observations. This really does not seem to be a sensible use of legislative time.

The power to make wider recommendations is in its infancy. There is no evidence that it causes harm. In fact, there is no evidence either way because it is much too soon for that. There is no evidence to suggest that abolition is needed, appropriate or necessary. As the TUC said in giving evidence to the Joint Committee, it seems ridiculous to get rid of a piece of legislation that affects only employers who have broken the law. This is not sweeping through a whole swathe of businesses that are doing the right thing. Where businesses have broken the law, they quite often find it useful to have the tribunal help them get things right. But what seems even more ridiculous is that by the Government’s own admission, the removal of the power to make wider unenforceable recommendations will leave intact the power to make exactly the same recommendations as observations. There really is no need for this clause.

Photo of Lord Deben Lord Deben Conservative

My Lords, much of the discussion on health and safety has been around the issues of believed or real overregulation. I have already committed myself to the view that there is a great deal of overregulation which it is right to stop and that there is too much regulation which has caused real and proper anger. However, the Government have to be careful, when it comes to deregulation, not to fall into the same trap; in other words, for the deregulation efforts to look like an additional activity, as if to say, “Let us see how many things we can claim we have got rid of”. I must say, very delicately, that that is what this looks like.

Before my noble friend Lord Sharkey made his point, I was going to put it in the form of a question. I was going to ask what sanctions there are against a tribunal that decides that, irrespective of the fact that it does not have the power to do so, it is going to make a comment. I suspect that there are no such sanctions, which means that the tribunal can in fact say what it can say under this power that is being removed. It might be argued, when the power was originally put forward three years ago, that it would have been sensible to have had some kind of recall procedure to make sure that when the recommendations had been made, someone would listen to them. That might have been argued, but it was not.

It seems that we have here a power that is merely a statement of what is a power in any case. It is not onerous. So we are spending time removing a power that exists, whether you have it or not. Even so, it has a purpose, which is that tribunals ought to think through not just the case in front of them, but how the case fits into a pattern of behaviour or a way in which a particular company appears to approach certain things. It does not do any harm to say to the company, “Look, you’re guilty in this case but don’t you think it would be more sensible if you had somebody in charge of this, or if you recognised that in that particular factory in that particular place this was likely to occur?”. You can imagine the sorts of points that might reasonably be made by a reasonable tribunal.

If I may say so, this is so unimportant a change that if it is pushed to a Division, I shall be happy to support the Government on the basis that it does not mean anything. But I ought to say to the Government that it is not sensible to bring forward this proposal in these circumstances merely to add one to the number of deregulation activities that have taken place. I say that to my noble friend because I believe in deregulation and want to get rid of a whole lot of stuff that is not necessary and is telling people how to lead their lives, which they can do perfectly well themselves. But let us not bring that into disrepute by having the kind of discussion that we are, unnecessarily, having today and which I have, no doubt unnecessarily, prolonged.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench 4:45 pm, 21st October 2014

My Lords, I will respond to the comment of the noble Lord, Lord Deben, because it is important that we understand the perceptions of business, as referred to by the Minister in the earlier debate.

According to the research that we do on a regular basis, businesses believe that regulation is an obstacle to economic growth. We carry out surveys every six months or so. Five years ago, 60% of businesses believed that regulation was an obstacle to economic growth. In our most recent survey, that figure has dropped to 50%. So 50% of businesses still believe that regulation is an obstacle to economic growth. Of course, what they would like in many cases is to remove large swathes of regulation. Clearly, that is just not possible. We influence business perceptions by removing small pieces of regulation over the years through measures such as this.

This is a small piece of regulation, of course, but it is the accumulation of small pieces of regulation that influences business perceptions. I do not for one moment want to open another debate but the perception that the world of regulation—the environment within which businesses operate—is improving is consistent with improvements in employment and economic growth.

Photo of Lord Rooker Lord Rooker Labour

Is the noble Lord, Lord Curry, really arguing what used to be the case before we had health and safety and had low pay, that the backstreet crooks who are cutting corners—and in this case breaking the law—get a free ride, whereas all the other companies that are following the rules on discrimination and not breaking the law are then taken to the cleaners by being undercut by companies that are breaking the law? Does the noble Lord realise that that is the argument he is actually making, defending lawbreakers undercutting legitimate businesses that are following the law and not conducting discriminatory practices?

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

The noble Lord, Lord Rooker, knows perfectly well that I am not recommending that.

This is a small measure, a power that employment tribunals may or may not exercise. I am happy to say that as an employer I have never been subject to this but for those companies I am aware of, the lesson they have learnt through having broken the law and failed the tribunal process is in itself sufficient for them to improve their behaviour and the way they treat their employees afterwards without this power needing to be exercised.

Photo of Lord Ouseley Lord Ouseley Crossbench

My Lords, the emphasis in the debate so far has been very much on the interests of the employer and business in seeking to remove as much red tape and as many burdens as possible—and that is understandable. Clause 2 and what it means may be small beer for the employer and a company, because there are now so few discrimination cases in which individuals can clear all the hurdles, but it is not small beer for those individuals. Many employees feel that discrimination in the workplace is something that they cannot do very much about. The hurdles which have been placed in front of them are such that few now get to the employment tribunal; they are not even able to afford to lodge their cases. If you are a cook or a cleaner, you are generally a low paid and vulnerable employee. Employers feel sufficiently empowered as to exploit that situation. We should recognise that this may be something that it would be good for employers not to have as a burden but we should also recognise that it is not a great burden when you consider the volume of cases that get to that point. We are talking about employers who have been found guilty of discrimination.

If someone has gone to the trouble of challenging unfair treatment in the workplace, gone through some form of internal process perhaps, paid their money and gone through conciliation, cleared all the other hurdles to get to the tribunal and won their case, we should be concerned that the tribunal might not be able to make recommendations to help the employer who is guilty of discrimination to put things right in a way that would make a difference to how employees are treated. It is about sending out those messages. While the Government have been keen to remove burdens from employers, they should certainly not advocate that employers go on being unfair to their employees. It is therefore important that Clause 2 should not stay in the Bill. That would enable us to give confidence to employees that, although there are all those hurdles, those who succeed in getting to the tribunal and win a case will be dealt with in a way that enables them to be treated fairly as employees.

I want to give an example of what I am getting at by citing the recent case which Police Constable Carol Howard brought against the Metropolitan Police. That case illustrates the folly of allowing Clause 2 to remain in the Bill. The tribunal found that the respondent, the Metropolitan Police Commissioner, directly discriminated against PC Howard because she is a black woman. It also held that the respondent victimised her because of her complaints of discrimination. She had had the temerity to lodge a complaint, have an internal process and then go beyond that to the employment tribunal—how dare she? She was harassed and victimised; she was even arrested and put on bail for more than a year during the process of the case and subsequent to the finding of discrimination.

What was worse, the tribunal found that the respondent had a policy of deleting findings of discrimination in its own internal grievance procedures, known as the “fairness at work” process. That is some fairness at work. You have an internal investigation. If any aspect of discrimination is found, the investigating fairness-at-work officers are told, “You have to remove that, delete it”. What sort of fairness at work process seeks to hide the truth of discriminatory activity and to mislead the tribunal about its own internal findings? Those distorted and doctored internal findings from a flawed process would never have come to light had not Carol Howard tenaciously, while being victimised and harassed, fought to get the disclosure of those internal reports, which the Metropolitan Police resisted strenuously but finally had to do. Had she not done so, the Met and its expensive lawyers would have got away with covering up extensive discrimination. Is that justice? Is that fair? Is that what we want?

As I said, it is understandable that we seek to unburden employers and companies of regulation that seems unnecessary—this may seem unnecessary because few people are making it to the end of the process—but the context I have just described shows that we have reached the point of serious imbalance in the process of seeking remedies through employment tribunal and discrimination cases, which enables employers, should they choose to do so, to ride roughshod over their employees’ rights when it comes to unfair and unlawful discrimination. Clause 2 adds insult to injury. The only employers who would want it are those who have something to hide or those who want to continue unlawfully and unfairly to discriminate against their employees.

Photo of Lord Avebury Lord Avebury Liberal Democrat

My Lords, I imagine that in the case of the police officer who successfully made a claim against the Metropolitan Police there was no recommendation by the tribunal. It might have been thought to be unnecessary in such a case because it received such widespread publicity that there would be pressure on the Metropolitan Police to declare what changes it had made in its policy so that similar cases of discrimination did not happen in future. However, we do not know what was the case in the 28 other recommendations, where the media may have been less inclined to look into the circumstances and focus attention on what sort of reforms were needed to the procedures that were the subject of the complaint against the violators of the Equality Act.

Have the Government looked at the cases where the 27 recommendations were made? With those accepted by the employers, which cost them a mere £2,000 on average, the procedure was obviously helpful to the employer. We are talking not about an additional burden but something that assisted the employer to avoid similar tribunal cases in future. If the argument behind the whole of the Bill is about the burden on employers, we are talking about the wrong subject here, because we are removing a burden by allowing the recommendations to be made, particularly when employers implement them. I would like my noble friend to say what happened in the other 19 cases where there was no response to inquiries by the EHRC. Would it not be helpful if your Lordships could know whether those employers also found the recommendations helpful? If so, and 100% of the 28 recommendations were accepted by employers and implemented at fairly trivial cost, surely that is a very strong argument for retaining the powers. Even if observations substitute for recommendations, they do not have quite the same moral force. If my noble friend can enlighten me on the other 27 cases, that would be very helpful to your Lordships in reaching a decision.

Photo of Baroness Thornton Baroness Thornton Shadow Spokesperson (Equalities and Women's Issues) 5:00 pm, 21st October 2014

My Lords, I agree with the noble Lord, Lord Deben: it rather looks as if the Government put a call-out to each department to offer up two or three regulations for abolition, without much thought about the priority and importance that they might have. I support the stand part debate on Clause 2. Indeed, I put my name to the intention to oppose it, introduced by the noble Lord, Lord Rooker, and supported by the noble Lord, Lord Sharkey. It seems hard to find anyone who supports the inclusion of this clause in the Bill, with the obvious exception of the noble Lord, Lord Curry, and Oliver Letwin.

As noble Lords have said, Clause 2 would remove the power of employment tribunals to issue wider recommendations to employers found to have unlawfully discriminated. I was party to passing that legislation in the Equality Act 2010. Indeed, on my side of the House, the Government of the time would have liked to have had some sanctions attached to this. However, there was a process of negotiation which the Conservative and Liberal Democrat parties agreed to. I make the point to the Committee that this is why we had that recommendation; it had all-party support from all parts of the House at the time.

The EHRC has said:

“We consider that the power to make wider recommendations is an effective way of preventing unlawful discrimination from occurring and helping employers to comply with their duties to treat their employees fairly. The case for … abolition has not been made. Clause 2 of the Deregulation Bill should therefore be removed”.

The Minister needs to explain to the Committee what is wrong with these recommendations. What is his message to the people who went through all the stress and trouble of going to an employment tribunal to right an injustice, as outlined by the noble Lord, Lord Sharkey, and other noble Lords, won there and then find that the employer is not being encouraged to do anything about those of their work colleagues suffering the same wrong? Does the Minister think that they should all go to the tribunal? What does he think should happen?

Finally, regarding the business perceptions referred to by the noble Lord, Lord Curry—it is the second or third time that he has mentioned them in these debates—I have to cite three cases. In Stone v Ramsay Health Care, the tribunal said that there was a “thorough and abject failure” by the employer,

“to have protected the claimant from pregnancy and maternity discrimination”.

It recommended training for senior managers and HR on pregnancy and maternity rights. In Crisp v Iceland Foods, the HR manager’s awareness of mental disability was “no less than woeful”, according to the tribunal. It recommended that those with HR responsibilities and area level managers be trained on disability discrimination rights. In Austin v Samuel Grant (North East) Ltd, the managing director had a long history of sending racist and sexist e-mails and the human resources manager had failed to deal properly with that issue. The tribunal recommended that the employer updated its policies on discrimination and that the directors and managers received diversity training. I cannot quite see what the overwhelming burden on industry is through those recommendations.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

My Lords, this has been a useful and serious debate. I listened carefully to what the noble Lord, Lord Rooker, said, as he always does his homework extremely seriously—although the suggestion that you could find even a cigarette paper between the approaches which Oliver Letwin and I take to the Bill is one that I find quite remarkable. As a coalition Government, we are absolutely solid and arm in arm.

The noble Lord raised a number of serious questions. First, on the GEO inquiry, the 26 companies were of course under no obligation to reply; those that had the most interest replied. The GEO had taken the need to collect evidence seriously by contacting every employer at that time but there is also a question about the burden on industry and companies that one provides by pushing harder on those issues. Secondly, he raised the question of equal pay audits and how those are compared. As I think the noble Lord may know, an equal pay audit ordered by an employment tribunal is a precise and mandatory requirement, with sanctions for non-compliance, to advance equal pay in the small number of organisations where a breach of equal pay has been found. It is also directly a transparency measure, as it has to be published. By contrast, as has been stated in this debate, wider recommendations in other discrimination cases are effectively discretionary for employers and cannot be imposed.

On the question of how much evidence we have on all this, these wider recommendations have been handed down in fewer than 2% of all successful tribunal discrimination cases since 2010.

On the Red Tape Challenge, I say to the noble Lord, Lord Sharkey, that the presumption is that if the legislation does not serve a useful purpose then it should be removed. The fact that it is not terribly useful but confuses people as it stands is not a reason for leaving it on the statute book.

The noble Lord, Lord Ouseley, in a very helpful and powerful speech, raised the Howard case, which we are all well aware is one of the most difficult cases in this area. I should point out that the wider recommendation was intended for use in those cases where the complainant has left the relevant employer. In this case, as it happens, Miss Howard was still a Metropolitan Police employee, which would mean that the tribunal would still be able to make recommendations that benefited both her and her colleagues in the continuing workforce. Of course, even if Miss Howard had left the Metropolitan Police when the case was brought, it would remain open to the tribunal to express the same criticisms as observations in a non-statutory context.

What the Government are proposing will not result in any reduction in either the rights of complainants or the effective powers of tribunals, nor does it reduce the rights of other employees in the businesses concerned as the wider recommendation cannot be enforced on their behalf. Nevertheless, under the Red Tape Challenge the Government are committed to removing legislation that does not serve any clearly defined purpose, particularly where it none the less creates a perception of burden and unfairness. It is not just a question of those who, as the noble Lord, Lord Rooker, powerfully put it, have broken the law; we are concerned about the perceptions of unduly onerous legislative demands.

The power to make these wider comments, a somewhat anomalous one in a claimant-based adversarial system, came into effect four years ago. It has proved problematic. It is rarely used—we are aware of around 40 cases, as has been said, where they have been made—and trade organisations have told the Government that the power has led to additional cost, and that it is confusing.

Most of the wider recommendations made by tribunals are generic. Of the 40 or so that we are aware of, over 90% concern training for management or the updating of company diversity policies. However, as I have said, tribunals do not have the power to enforce such recommendations. Post-tribunal action is largely taken voluntarily by employers that have lost a discrimination case. Unless it was a one-off incident, business sense would drive changes in workplace practices to avoid a similar case being brought against them in future.

Perhaps I can give a few numbers in the areas that the noble Lord, Lord Rooker, raised. In 2012-13, the Government Equalities Office partnered the British Chamber of Commerce in events across the country, explaining the Act to small businesses. Around 300 businesses attended the events, and a follow-up booklet, Business is Good for Equality, was more widely distributed by regional chambers to their members, which altogether employ around 5 million people. Some 300 businesses attended the 10 short sessions to learn first hand about their obligations under equality law; that is more than seven times the number of employers that have received a wider recommendation in the four years since 2010. I hope that that provides some more detail of the sort that the noble Lord was asking for.

I know that concerns have been expressed that this repeal will reduce protections against discrimination in the workplace. That is not the Government’s intention and it will not be a result of this reform. Tribunals will continue to have the power to make recommendations and observations on their behalf. The question is: has this power done its job? I would say that for the employer, the wider workforce and the business in general, the answer is that it has not. There is instead a very small and unenforceable benefit balanced against the larger cost and the problem of uncertainty for business. I therefore urge that this clause remain part of the Bill.

Photo of Lord Rooker Lord Rooker Labour

Well, I thought that was a disgraceful speech, defending law-breaking employers. I have been where the Minister is. If I had sat through the debate I have just heard, I would have said, “Actually, I will take the recommendation back”. I would go to my Secretary of State and say, “I was going to screw this up anyway; the House was against me. We need some better arguments”.

I say to the Minister that the Government need better arguments, and the Red Tape Challenge is not one to use; you cannot rely on it for this. During the Red Tape Challenge, I came across an example where anecdotal comments by two environmental health officers caused the weight of the department and the committee led by the noble Lord, Lord Curry, to come down on the Food Standards Agency and say, “Keep unsafe kitchens in parks and village halls”. We said, “No, unsafe kitchens kill people”. They said, “But the Red Tape Challenge has actually identified this”. It was two anecdotal comments from environmental health officers on a website. That is the intellectual weight of the Red Tape Challenge. It is nonsense when you actually look at it.

I say to the Minister that he cannot rely on the Red Tape Challenge in this case because I do not recall it being used when we did the committee inquiry upstairs. I say to the Minister what the then Prime Minister said to me: “One last chance”. Would he like to take this away, come back on Report, and have a little think about it with a bit more fresh evidence—fresher than we have at the moment? Does he not think that would be a good idea?

Photo of Lord Rooker Lord Rooker Labour

Well, I know that that noble Lord would not want any evidence, but he is not the Minister. I am asking the Minister. Would it not be a good idea to get more up-to-date evidence and take it away to have a little think about it? That is all that I am asking him to do.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

My Lords, of course, between Committee and Report, as the noble Lord is well aware, the Government take things away and have discussions in the Corridor. Officials look at the speeches that have been made and attention is drawn to their implications. Of course we will undertake to do that, and I am happy to talk further to the noble Lord, Lord Rooker. That is the way in which we always operate in this House: we take very seriously all the arguments made in Committee.

Photo of Lord Rooker Lord Rooker Labour

The noble Lord has not said he is taking it back to the Government.

Photo of Lord Hardie Lord Hardie Judge

Can I clarify in my own mind what the argument is? As I understand the Minister, the justification for the clause is that it would meet the test of the Red Tape Challenge. However, I also understand that the burden of the power will still exist for a tribunal to make an observation in the same terms as a recommendation. I am struggling to understand how that does not impose upon the employer the same burden as exists at the moment. Perhaps the Minister could help me out.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

My Lords, I will correct something that the noble Lord, Lord Rooker, has just said. The Red Tape Challenge process is not influenced by two environmental health officers. There is a robust process which follows up the public consultation process which is part of the Red Tape Challenge. There is a star chamber with Ministers, independent representatives and government officials who thrash out the various comments that have come through the Red Tape Challenge process, and which have eventually arrived as part of the Bill.

Photo of Lord Rooker Lord Rooker Labour

And the result of that is that I was asked to keep unsafe kitchens.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

I simply answer that the argument is that these provisions are unnecessary. It will make a small amount of difference, but the fact that we have removed them will mean that the sheer weight of regulations and expectations that employers have will be reduced a little. That is, in itself, useful.

Division on Clause 2

Contents 234; Not-Contents 194.

Clause 2 agreed.

Division number 2 Deregulation Bill — Committee

Aye: 232 Members of the House of Lords

No: 192 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Clause 3: Apprenticeships: simplification

Amendment 2 not moved.

Clause 3 agreed.

Schedule 1 agreed.

Clauses 4 and 5 agreed.

Clause 6: Requirements to wear safety helmets: exemption for Sikhs

Amendment 3

Moved by Baroness Thornton

3: Clause 6, page 4, line 5, leave out subsection (1)

Photo of Baroness Thornton Baroness Thornton Shadow Spokesperson (Equalities and Women's Issues) 5:27 pm, 21st October 2014

My Lords, it is important that I say from the outset that these Benches are not opposed to these amendments to remove the anomaly that currently exists in law which provides turban-wearing Sikhs with an exemption from having to wear safety helmets on construction sites but not in other workplaces. This is a probing amendment.

Noble Lords will know that keeping uncut hair and wearing a turban are an integral and mandatory part of the Sikh faith. Both male and female Sikhs wear turbans, and it is an integral part of the body to devout Sikhs, who will not wear anything in place of, under or over it, such as a cap or a hat. The compulsory wearing of turbans for Sikhs is a unique aspect not only of their faith but of their racial and cultural identity. I thank the Sikh Council UK for discussing this matter.

There are some remaining issues that I would like the Minister to address, although he does not have to answer them right now. I would be very happy to have these questions answered in writing and with a meeting, but I think that there are some quite serious issues. What is the reason for excluding the Armed Forces and emergency services from the provisions exempting turban-wearing Sikhs from having to wear their safety helmets? I remind the House of the role that the Sikh community played in both world wars; if you look at the pictures, they are there in their turbans. Indeed, there is a picture of Sikhs in their turbans at Sandhurst dating from 100 years ago. Would the Minister please place copies of the responses to the consultation that was carried out earlier this year in the Library? That would give noble Lords an insight into the issues that I am about to raise.

Are the exclusions limited only to the Armed Forces and emergency services—fire, police and ambulance—or can employers in other fields avail themselves of those exclusions, such as the British Red Cross or other early responders? Are the Government agreeable to placing the exclusions of the Armed Forces and emergency services into secondary legislation? Will they commit to consulting the Sikh Council UK before issuing the guidance on the Bill, and can they ensure that relevant bodies for the Armed Forces and emergency response services encourage those services to engage with the Sikh Council UK to review existing practices and formulate new guidance and policies, as appropriate, in the light of the legislative change? Are the Government agreeable to extending the exemption for turban-wearing Sikhs from having to wear safety helmets in the pursuit of leisure activities, similar to the exemptions that are already in place for motorcycles and horse-riding? Technology advances over time and this is not only technologically possible but things may change in future, so would it be prudent to future-proof this legislation and not permanently set out exclusions in the body of legislation?

Photo of Lord Singh of Wimbledon Lord Singh of Wimbledon Crossbench 5:30 pm, 21st October 2014

My Lords, I support the retention of the original clause. I speak on behalf of the Network of Sikh Organisations, the largest Sikh organisation in the UK, and as an expert witness in the famous Mandla case in the early 1980s which, incredibly, had to go all the way to the House of Lords to secure the right of a Sikh schoolboy to wear a turban in school and make religious discrimination against Sikhs contrary to the Race Relations Act 1976.

Sikhs are already free to wear turbans on building sites. This measure is simply a tidying-up exercise to ensure that Sikhs are not harassed by insensitive health and safety zealots in offices and workshops where there is minimal risk of injury. I spent a day and a half in the witness box in the Mandla case and would like to take just three minutes to explain to the House the significance of the turban. It is not cultural headgear like the hijab but a religious requirement to remind us and others of the need to stand up and be counted for our beliefs, particularly our opposition to religious bigotry in all its forms, and for the freedom of people of different faiths and beliefs to worship in the manner of their choice. So strong is this belief in Sikhism, that our 9th Guru, Guru Teg Bahadur, gave his life defending the Hindu community’s right to practise their faith—a religion different from his own—against alarming Mughal attempts at forced conversion.

It was Voltaire who said, “I may not believe in what you say, but I will defend to the death your right to say it”. Nearly a century earlier, Guru Teg Bahadur gave this noble sentiment practical utterance. The Guru was publicly beheaded in the centre of Delhi. The executioners challenged Sikhs, who then had no recognisable symbols, to come forward and claim their master’s body. They hesitated to do so. There are parallels here with the Bible description of Peter denying his closeness to Jesus Christ at the crucifixion.

The 10th Guru, Guru Gobind Singh, decided to give Sikhs visible symbols of their commitment to Sikh beliefs—a sort of uniform like that of the Salvation Army. The turban is now the most recognisable of these symbols. Sikh teachings of tolerance and respect for the beliefs of others are a powerful antidote to the extremism and persecution of minorities all too evident in our world today. Our world would be a happier and more peaceful place if more people were ready to stand up and be counted in the fight against intolerance. This clause is a sensible tidying up of the law to extend existing exemptions for building sites to sensibly include other workplaces. I give it my full support.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

My Lords, I thank the noble Lord, Lord Singh, for that immensely helpful speech. As we have discussed these matters, I thought about my first year at university when my next door neighbour in the hall of residence I was in was a young man called Rahul Singh, who since then has become a rather distinguished writer in India. Every morning he used to comb out his hair in the corridor just outside my room. It was a wonderful sight to see each morning.

I say to the noble Baroness, Lady Thornton, that the Government are extremely well aware of the role played by Sikhs in World War I and World War II. It is very much part of what we are doing to commemorate World War I. As she may know, I sit on the advisory board. This summer, I was taken by the FCO World War I Unit to an excellent exhibition on the Sikhs in World War I at the School of Oriental and African Studies. The United Punjab Welfare Association is active in ensuring that the Government do not forget this in any way and this is something that I trust we will begin to follow through. I think I recall the noble Lord, Lord Singh of Wimbledon, saying to me that he thinks that he is almost the only Sikh living in this country who does not claim to have had a relative who served in the Indian Army during the First World War.

We are very happy to accept that we should respond in writing to the points that the noble Baroness has made and with a meeting, if necessary, to make sure that we have all the information which is needed. The issue is relatively straightforward, as the noble Lord, Lord Singh, said. Currently, turban-wearing Sikhs are exempted in Britain and Northern Ireland from legal requirements to wear a safety helmet while on a construction site, which also protects employers from liability. These clauses will extend the scope of the exemption to all workplaces and thereby increase the ability for turban-wearing Sikhs to pursue their chosen profession, whatever that may be.

In Great Britain, members of the Sikh community have faced disciplinary hearings and dismissal for refusing to wear head protection. Others are unable to follow their chosen professions. These provisions are therefore considered to be a necessary and sensible method of providing a consistent approach across health and safety legislation. They will also help to place turban-wearing Sikhs on a fair and equal footing when seeking employment. Perhaps I should also say that the number of turban-wearing Sikhs who find themselves in this position in this country is relatively small. This is therefore a small but useful and constructive change in the legislation.

The original exemption was limited to construction sites because, at the time of enacting, only workers in the construction industry were mandated to wear safety helmets. Legislative requirements regarding the wearing of safety helmets have since developed and now extend to a number of other industries where a risk assessment identifies the need for specialist head protection. There are certain jobs and industries where the wearing of a turban may come into conflict with these legislative requirements regarding the wearing of safety helmets et cetera. Employers in non-construction sectors must therefore balance their obligation to protect the health and safety of their employees against their duty not to discriminate against a turban-wearing Sikh employee on the grounds of religion or race.

Clauses 6 and 7 will be subject to certain exclusions for hazardous operational tasks where a risk assessment requires the wearing of a safety helmet. The types of tasks that are hazardous are those where it would not be sensible to allow the person to carry them out without appropriate protection, including entering a burning building or where the protective clothing needs to enclose the whole body, such as in bomb disposal or dealing with hazardous materials such as chemical leaks, biohazards or radiation. This matter is not just about individual choice—failure to wear appropriate head protection in such circumstances puts not only the individual at risk but colleagues who may have to effect a rescue in the event of an unprotected team member suffering head injuries. These exclusions will not prevent Sikhs from taking up employment with institutions such as the Armed Forces or the police and fire services.

In addition to extending the exemption for requirements to wear safety helmets, this clause also extends the limited liability provisions of other persons, such as employers, for any injury, loss or damage sustained by a Sikh individual who chooses not to wear a safety helmet in reliance upon the exemption.

I hope that this answers all the queries that have been raised. I also hope that Clauses 6 and 7 will stand part of the Bill, and trust that the noble Baroness, Lady Thornton, will withdraw her amendment.

Photo of Baroness Thornton Baroness Thornton Shadow Spokesperson (Equalities and Women's Issues)

I beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Clause 6 agreed.

Clause 7 agreed.

Clause 8: Driving instructors

Amendment 4 not moved.

Clause 8 agreed.

Schedule 2: Driving instructors

Amendment 5

Moved by Baroness Kramer

5: Schedule 2, page 76, line 15, leave out from “licence”” to “as” in line 16 and insert “has the same meaning”

Amendment 5 agreed.

Schedule 2, as amended, agreed.

Clause 9: Motor insurers

Amendment 6 not moved.

Clause 9 agreed.

Schedule 3 agreed.

Clause 10: Private hire vehicles: circumstances in which driver’s licence required

Debate on whether Clause 10 should stand part of the Bill.

Photo of Baroness Thornton Baroness Thornton Shadow Spokesperson (Equalities and Women's Issues)

My Lords, I understand that the Minister has something new for the Committee, which it may be better to hear before we proceed any further.

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

My Lords, as you will know, the Government introduced three measures into the Bill earlier this year relating to the regulation of taxis and private hire vehicles. Although an extensive review of the legislation has been carried out by the Law Commission and its recommendations are being considered, the Government decided that three measures could be taken forward separately to help reduce burdens on businesses more quickly. This clause is one of those.

Its purpose was to allow the use of private hire vehicles for leisure purposes. Noble Lords will be aware that, outside London, a person who is licensed as a private hire vehicle driver cannot use the family car and therefore has to purchase a second car. At £20,000 or £30,000, or the lease equivalent, that is a barrier which denies people employment. It is an issue that we need to address at some point. It also means in particular that in a number of rural areas there is, frankly, a shortage of private hire cars and taxi services. Bringing in more of those vehicles and their services for local people could be helped by removing this barrier.

However, after the Government listened closely to issues raised about the way in which we have presented this clause, we have decided that listening, as we always do, is important, and concluded that although we can still see arguments for tackling this underlying problem—I think that there is general agreement on that—it would be better done as part of the package of measures recommended by the Law Commission in a broader reform of taxi and private hire vehicle licensing than through this clause.

It is therefore my intent—although I am not sure how the procedure works—to withdraw this clause, and I am delighted to have the opportunity to do so.

Clause 10 disagreed.

Clause 11: Taxis and private hire vehicles: duration of licences

Debate on whether Clause 11 should stand part of the Bill.

Photo of Baroness Thornton Baroness Thornton Shadow Spokesperson (Equalities and Women's Issues) 5:45 pm, 21st October 2014

My Lords, I am very grateful to the Minister for withdrawing Clause 10 and I hope she will feel that Clauses 11 and 12 deserve the same treatment, given that the Law Commission has been asked to look into the current legislation. We are very glad that Clause 10 has been pulled from the Bill, but Clause 11 has problems and Clause 12 is just as dangerous as Clause 10.

Clause 11 will end annual licence renewal and set a three-year standard duration for licences. The annual licence renewal helps licensing authorities to recognise changes in a driver’s convictions or medical status. The reform is likely to make it more difficult for licensing officers to monitor behaviour, ensure that drivers are fit and proper to drive and take action when necessary. Effective implementation of this clause will require local authorities to sign up to the Disclosure and Barring Service’s updates service and receive information about convictions during a licence term. This is a relatively new service and it is not yet known how it will work in practice. It is clearly important, so I hope that the Minister will explain why this matter cannot also wait.

Clause 12 will enable PHV operators to subcontract a booking to another operator who is licensed in a different area. We and many others believe that passenger safety will be undermined because only licensing officers from a licensing authority where a vehicle and driver are registered currently have the power to take enforcement action. The Law Commission has recommended that licensing authorities would have the power to enforce standards in respect of out-of-area vehicles, which will be crucial for their safety. The public, and vulnerable passengers in particular such as women or disabled people, may call specific operators because they feel that that operator is reliable and safe to travel with. This reform means that the public will lose their right to choose which operator they travel with. If someone calls operator A, their preferred choice, operator B may turn up.

The Law Commission’s work was undermined in January 2014 when the Government announced a 10-day consultation on these three measures of PHV deregulation. In March, they were introduced as last-minute amendments in Committee in the Commons.

The clauses aim to meet the Red Tape Challenge. The challenge is not about putting people in unsafe situations and Clause 12 does just that.

Richard Burden MP’s office contacted the Department for Transport on 1 October to ask whether an impact assessment had been prepared. The impact assessment was published online on 2 October and was signed off by the noble Baroness. Page 11 revealed many of the issues that have allowed Clause 10 to be withdrawn. Page 16 of the impact assessment states:

“There has been minimal analysis”,

due to what has happened. The analysis, it continued, was,

“based on the data provided by the PHV trade associations. Due to time constraints there has not been a significant amount of analysis”,

to justify these clauses being in the Bill. The Government have tripped over themselves to fulfil, as I said earlier, the Red Tape Challenge of bringing in deregulation. In this case, it means that they are putting people’s safety at risk.

The reason that Clause 12 is so important has been brought to our attention by a number of organisations, including some student bodies, Milton Keynes Council and Alexis Jay in her report into child sex abuse in Rotherham, in which she highlighted significant concerns about taxi licensing. We have spoken to her personally about this and she is very worried about the implications that these changes have. Her report says that, at a number of council meetings,

“One of the main items for discussion … was safe transport”.

When asked about minicabs,

“there was an immediate and consistent response from … young women and men”,

on all occasions. In fact, all of them avoided taxis “if at all possible”. People do not have any choice in remote areas late at night but to use taxis. If someone finds a safe taxi company—there are ones who focus particularly on women—they do not want someone to turn up whom they do not know and who may not be the appropriate person to drive them.

Our experience in Milton Keynes, where serious errors by a sub-committee of councillors on licensing led to an inexcusable decision to allow a convicted sex offender to operate a private hire vehicle, illustrates the importance of getting the balance of this regulation right. The leader of Milton Keynes Council has written to us personally, asking us to oppose the clause.

Warwick Students Union wrote to us, saying that its primary concern on Clause 12 is the effect that it would have on preferred suppliers. It says:

“We are working with local authorities to put together a tendering document for a preferred private hire service—using our strong collective consumer power to stipulate better standards of service, safety and fares. Lots of other Student Unions do this such as Leicester and Birmingham to protect their members”.

We know that two women students were raped in Warwick because they got into a minicab—possibly they should not have done so, but that is what happened. The student union continued:

“We feel that this Clause would largely undo the work done by Students’ Unions across the country to ensure the safety of their members”.

It is quite clear that the Government need to take this away and think again. That is what we are asking them to do. I am sure that the Minister would not want to have students and disabled people finding themselves in unsafe situations, but this is what we think the impact of the clause will be.

Photo of Lord Bradshaw Lord Bradshaw Liberal Democrat

I support what has been said by the noble Baroness, Lady Thornton. Anybody who knows anything about the taxi trade knows that some parts of the trade are of questionable integrity. The annual licensing inspection by the local authority where the taxi is based is the best safeguard that we can have.

On the Minister’s point that this saves people buying a second car, saving them £20,000 to £30,000, I can assure noble Lords that most private hire cars are nowhere near that standard. In fact, I can reminisce about my time in Manchester, when I was being driven to the airport in a private hire car. We passed a very used car depot. I said to the driver that his car was very old. He said, “Yes, it’s got a few months to run on its MOT. When its MOT is up, I just go into the car auction and buy another one with a few months on its licence”. He was talking about spending £200. I think that is much nearer the truth.

I also dispute the view that many rural areas do not or cannot get taxis. I live in a rural area with big rural surroundings and there are plenty of opportunities to get taxis if one thinks about it and phones them up beforehand and that sort of thing.

Students and all women are very vulnerable when they get into a taxi where the driver has not been properly licensed and had his credentials inspected—indeed, if the vehicle itself has not been properly inspected. When I was on Oxfordshire County Council, Oxford City used to call in its taxis or private hire cars every six months because they have a high mileage and the annual check does not show up the defects. If we are talking about people having a licence to operate a taxi, an awful lot of things can happen in three years. Extending the situation so that a taxi could operate in an area where the driver is not licensed is potentially dangerous.

I do not see this as much in the way of deregulation. Local authorities do not spend a huge amount doing this work and the drivers have to pay a fee for it. However, I think it raises considerable dangers, to which the noble Baroness, Lady Thornton, has referred, and it would be far more sensible if the Minister were to take this away and carry out some more work on it. The Bill has some time to run. The protests I have received from local authorities and organisations that are concerned with the welfare of people—notably, the Suzy Lamplugh Trust but lots of others—are that people are genuinely concerned about safety. That is what I believe should be taken properly into account.

Photo of Lord Skelmersdale Lord Skelmersdale Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, before the noble Lord, Lord Bradshaw, sits down, I wonder whether he can educate me. If the hired car driver of which he has just spoken replaces his car for a short period, surely that replacement car would also need to be licensed. It would be very helpful for me and perhaps the rest of the House if he could explain that point.

Photo of Lord Bradshaw Lord Bradshaw Liberal Democrat

I think that most people who are in this position make proper provision to have their car serviced so that it is safe. It is their responsibility to provide a safe car. If he is unable to produce one, I do not think he should be carrying passengers. I have had experience of this in Oxford, where the inspectors—there are not many of them—find a car with defective tyres. Well, I am sorry, but if the driver has chosen to drive a defective car, it is hard luck if he has to wait for it to be repaired. He is supposed to keep the car in a good and safe condition in which to carry people.

Photo of Lord Skelmersdale Lord Skelmersdale Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, I really must protest. That was a beautiful answer, but unfortunately not one to which I was addressing my question, which was whether the council would or would not license the driver in the new car.

Photo of Lord Bradshaw Lord Bradshaw Liberal Democrat

The answer to that is yes, it would. If the driver was able to produce a better car—it may not be a new one—and he went to the local authority and says he has given up using car A and is going to use car B, yes, it would. Local authorities are not, as sometimes painted in your Lordships’ House, absolutely unfeeling and draconian bodies.

Photo of Lord Greaves Lord Greaves Liberal Democrat

My Lords, like my noble friend Lord Bradshaw I can see a great deal of merit in these clauses, but like him I hope, since we are at an early stage in the Bill, that the Minister will say some soothing words and agree to consider these matters further. It would be unfortunate to take this to a vote today and simply reject these clauses and not be able to bring things back later. There are really serious concerns here on the part of lots of reputable organisations, and local authorities and their representatives around the country.

I should declare an interest as a member of a taxi licensing authority, Pendle Borough Council. I should also say that taxi licensing and taxi operator licensing is something I keep as far away from as possible because it is one of the biggest cans of worms in local politics, especially in an area such as mine. I do not have direct, hands-on experience of this and I have not prepared anything to say today so I may be wrong in what I am saying. Would the Minister agree with me that there is some confusion about the discussion here?

As I understand it, Clause 11 refers to the licensing of people—either operators or drivers—and not the licensing of the vehicles themselves. Therefore, there are two separate things here. The Minister is nodding, so I shall continue with more confidence than I had when I started my speech. There is the question of whether individuals are sufficiently proper, upstanding and reputable to run a taxi business and whether individuals are appropriate to drive a car in the very intimate circumstances of taking passengers whom they do not otherwise know. That is obviously a situation where people have to be proper and upstanding.

Then there is the question of the licensing of vehicles, which is another great can of worms. As I understand it, the Government are not proposing to make any changes here and it would be helpful if the Minister could confirm that when she replies. Any reduction in the powers of local authorities to check vehicles and make sure that they are in good condition would be appalling.

So far as individuals are concerned, travelling in a taxi is a very personal thing. If you hail a taxi in London, it is a black cab and you drive around London with people all around you. The layout of the black cab is less personal than that of an ordinary sedan-type car. You have to rely on the driver, first, to be a competent and safe driver and, secondly, to be trusted not to do things that they should not do—not to cheat you when they tell you how much to pay, not to molest you in some way and not to behave in a generally unpleasant and deplorable way. That is very important, and there are complaints about those things all the time—some obviously more justified than others. However, it seems to me that the idea of reducing the opportunity to question people and to check that they are appropriate as drivers needs to be thought about very carefully.

I am more concerned about a private hire firm being able to subcontract a fare to another private hire firm. This needs to be looked at very carefully, although there are clearly circumstances where that is sensible. If you ring up your normal taxi firm and it says, “Sorry, our vehicle adapted for your disability is out of action and we would like to subcontract to somebody else. They’re a good firm”, and explain where they are from, that is obviously a sensible arrangement, but it is up to the person who has called the taxi firm to decide whether it is sensible from their point of view. However, I would be concerned about a taxi firm being able to do that without telling the customer. If a firm turns up at your door when you are expecting a different one, you cannot be sure whether the cab has come from the firm from which you ordered the cab. You might think that someone has overheard the call and is trying to steal the fare, which is the kind of thing that goes on.

I am simply saying that there are circumstances in which it is sensible for fares to be subcontracted in this way but it has to be done by giving clear information to the person asking for the ride and it has to be with their absolute consent. If the Government want to make this change, we want some clear assurances, preferably written into the legislation, that it will be done on that kind of basis and that very clear safeguards will be in place. At the moment, it seems that those safeguards are not there and that there is an opportunity for people to make these arrangements willy-nilly. I am not happy about that.

There may be people here who are wondering what on earth we are talking about. They may be asking why we believe that these safeguards should be there, and why we believe that some taxi firms are better than others and that some are firms that we would not under any circumstances ever use again. I can think of at least two occasions when I have been catching a taxi to the station to come to your Lordships’ House and I have come near to death because of the incompetence of the driver. I would not under any circumstances want to use those firms again, but there are other taxi firms in which I have great confidence.

Some people hire taxis on a regular basis. They may live in a village and want to go to the town, and they need a taxi because there is no local bus service, or they may have a large family and know that going in some sort of private hire vehicle is cheaper than going on the bus, as is the case nowadays in many places. If you are in this situation regularly, you build up a personal relationship with the drivers. When you phone the firm, you tell them which driver you want. You might say, “I don’t want him again but I’ll have her. She was very nice”. As the noble Baroness, Lady Thornton, said, in some cases women will want a woman driver, and who is to say that they should not? Therefore, it is a personal relationship, and allowing a firm to subcontract in a willy-nilly way is not acceptable.

There is a huge amount of concern about this around the House and in different parts of the country, and I think that it would be very sensible for the Minister simply to say, “We understand these concerns. We’ll go back and talk about it and then perhaps come back at a later stage of the Bill either having changed our mind or with some assurances”.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench 6:00 pm, 21st October 2014

My Lords, I have some sympathy with the comments just made by the noble Lord, Lord Greaves, but let us be clear: these are deregulatory measures. The annual licence fee for a taxi is a cost on business, and extending the period would be deregulatory and welcomed by taxi firms.

I challenge the assertion that under Clause 12 individuals will be placed at greater risk. Of course, those of us who use taxis prefer to use our regular firms. As someone who has a very keen family interest in disability, the last thing I would wish would be for any individual to be put at greater risk. However, we are not suggesting in Clause 12 that unlicensed taxis be used. These are taxi firms that have been licensed by a neighbouring authority, so they have been subject to the same licensing process as the firms to which the request for a cab has been made. In my own case, like other noble Lords I use taxis from time to time. If my preferred taxi firm is unable to transport me to the station or the airport, I have to go further afield and find another firm. That taxi firm then loses that business and maybe will lose my future business because I have transferred my allegiance to another firm.

This is an opportunity to free up the market for taxi firms and to allow them to operate outside their immediate geographic area. It is something that we should support.

Photo of Viscount Ridley Viscount Ridley Conservative

My Lords, I apologise to the Committee for not being present at Second Reading, but perhaps I may be allowed to comment on Clause 12, which I believe is a fair and reasonable measure that will bring improvements for customers.

At the moment it is only outside London that a private hire operator cannot subcontract a booking in a different district. Is there something peculiarly wicked about provincial private hire firms that does not apply in London? A London-based private hire firm can subcontract, as can a foreign unlicensed company, and this gives it a huge advantage. It puts private hire firms outside London at an iniquitous disadvantage, but it also leads to perverse, inconvenient and even unsafe consequences for customers. I shall give your Lordships a real example.

There is a private hire firm in Birmingham that has a contract to transport any staff with minor injuries from Jaguar Land Rover’s plants to hospital. As the firm cannot subcontract a booking to an operator in another district, if the injury occurs in the Wolverhampton plant, the car does a 55-mile return journey to take the person to a hospital 2.6 miles from the plant. For most of that round trip the car is empty. Jaguar Land Rover wants to deal with a single operator, but this is the result.

Another real example is of a private hire operator in Derby asked by a customer to collect an important client in another district. It must refuse the job, and refuse to arrange it with another firm in that district. The firm appears unhelpful to its customer. I have a third real example. A private hire firm in north Tyneside has a member of staff with a terminal illness. He would like to continue working, but from home. Since he lives just outside the north Tyneside border, that is illegal. I have another example. People often hire private minibuses to do long journeys for groups of up to six or eight people—to an airport, for example. That vehicle must return empty. If it breaks down en route, the operator is breaking the law if he asks another firm in the district where the breakdown happens to take the customer on. This measure would reduce congestion, pollution and noise a little, too.

Please note that the beneficiaries of this change in the law would include people with disabilities. That is because a wheelchair-enabled vehicle that has taken a customer from his home in district A to a hospital in district B would now be able to collect a different customer at the hospital and take him back to district A. As far as I can tell from Hansard, when exactly these measures were discussed and passed in this House in 1998 for London, one organisation that was widely praised in the debate for its support of the measures was the Suzy Lamplugh Trust. It therefore surprised me to hear today that it is against this measure. If this rule is good for London, it is surely good enough for the rest of the country. Can it be that London-based private hire firms are worried about competition from firms based outside London? This is an excellent and sensible measure that has benefits for customers.

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

My Lords, Clauses 11 and 12 cover separate, different but sensible measures. Obviously, a thought for safety penetrates all of our thinking as we address this range of issues.

To pick up on the issue raised by my noble friend Lord Bradshaw and explained by others, particularly my noble friend Lord Greaves, the amendments do not in any way change the rules on vehicle licences. Those are tough and carried out by local authorities and there is absolutely no change. If my noble friend Lord Bradshaw knows a firm that thinks it can run a £200 car for successful private hire and meet the standards, I suggest that he call the local authority. It would be extremely difficult for a car that has that kind of market value to achieve the standards that are rightly required by local authorities in licensing those vehicles.

Clause 11 aims to reduce the administrative and financial burdens on some taxi and private hire drivers. The measures we have included in the Bill, which I will address in relation to Clause 12, will also help to improve the experience of booking taxis and private hire vehicles.

I join with others in saying that in making his case my noble friend Lord Greaves prayed in aid London. Both the measures in Clause 11 and Clause 12 are already the status in London. Indeed, when we turn to London as the example that we are trying to copy, that is exactly what Clauses 11 and 12 do. It means that we have a good history of the way in which Clauses 11 and 12 function.

Clause 11 will standardise at three years the duration of both taxi and private hire vehicle driver licences; and at five years the licence for a private hire vehicle operator. Shorter periods would be permitted only where there are specific circumstances around a particular application. For example, a local authority might decide that a probationary period was necessary. Typically the duration would be three years for the vehicle driver licence and five years for the operator licence. Frankly, it means that those people will not have to renew their licences as frequently as they do in some areas.

The Department for Transport carries out a biennial survey of licensing authorities. Our 2013 survey showed that nearly half of licensing authorities grant taxi and private hire driver licences for three years, so this is not a sudden revolution. A number of local authorities use a shorter term but we can see by comparing safety records that there is nothing to suggest that those local authorities that grant their licences at three years have an inferior record. That is important to note. When it comes to the operator licences, a number of licensing authorities routinely grant private hire operator licences for five years although the substantial majority do less than five years. Again, there is nothing to suggest that there is a difference in safety between one authority and another on the basis of those differences in licensing terms.

The Government therefore consider that this is an area of taxi regulation that would benefit from deregulation. By setting a standard duration of three years for taxi and private hire vehicle driver licences and five years for private hire vehicle operator licences life will be made a lot simpler and substantially cheaper for licence holders. We estimate that the measure will save drivers around £8 million per year and operators around £1 million per year. People who are in this trade are not wealthy people. They find it tough to make a living and any little help we can offer is valid when it is not putting safety at risk.

I appreciate that some stakeholders have expressed concern about safety implications. There may be a slight misconception. It is now the case that many licensing authorities that grant annual licences actually carry out criminal record checks only every three years. Although the licence is annual, the criminal records checks—the issue that has noble Lords exercised—are typically a three-year process. Of course, we are now saying that the standard for criminal records checks will be three years. That would be a relatively small change for most authorities. They will continue to do those formal checks. As I said, we have examples in London and in the many local authorities that already use that three-year cycle that it is not associated with additional risk.

Clause 12 will allow private hire vehicle operators to subcontract bookings across licensing boundaries. Again, this is a capacity that has been available continuously for London. The noble Viscount, Lord Ridley, made the case extremely well and illustrated the many situations in which this is an extremely important measure and the extent to which car hire companies outside London are put to a disadvantage compared with London operators. One of the main motivators behind this measure is that it is so difficult when people call a taxi firm that cannot provide a taxi and are then turned away. I have a relevant personal experience, which could have turned out to be extremely difficult. I was in Gloucestershire and going to visit an elderly friend in a nursing home. I got to the station and there was no one around. I looked at the board and started calling taxi firms and car hire firms and not one could supply a car. They explained to me that they could not call someone else because they would have to call out of the area and they could not do that. In such cases one would hope to have a mobile phone that is smart-enabled to get onto the web to try to find other firms in the area to call. I was glad that I was not a mother with three children, that it was not getting dark and that it was not raining. It seems unreasonable not to allow the taxi firm to subcontract in order to be able to meet the booking.

We are often concerned about young people out late at night who try to find a taxi to take them home safely. In that situation, we do not want them having to track down one company after another. They should be able to call an operator who they have confidence in who can find them a taxi, even if it is subcontracted from out of area. You can already subcontract in area, and I should make that clear to those people who may have used subcontracted taxis or private hire vehicles and were not aware of it.

The noble Lord, Lord Greaves, said that he was concerned about disabled people. Surely that is the group which has the most to benefit from this change. Most car hire companies have a limited number of wheelchair-accessible vehicles and there may be circumstances where a disabled person needs to travel in a particular kind of vehicle. It is all very well to say that disabled people need to make advance bookings, but I want people with disabilities to be able to live their lives as freely as the rest of us can and not always have to think about things in advance—or, frankly, have to do without. We have a mechanism here which gives an operator the scope to reach out of area and subcontract to someone else who has a wheelchair-accessible vehicle to meet a need. That is exceedingly beneficial.

I want to make it clear that the initial operator who takes a call and makes a booking remains liable to the passenger who made the booking. He is the person with whom the contract has been established. If someone chooses to call a particular operator, that operator retains the liability for the subcontractor, so the terms and conditions, the recording of the booking and the fare, if it has been agreed, all remain with the operator who the customer has contacted.

Photo of Baroness Thornton Baroness Thornton Shadow Spokesperson (Equalities and Women's Issues)

I should like to ask the noble Baroness two questions. First, has she taken into account the fact that enforcement works differently in London, with TfL working in conjunction with the police on street enforcement, yet there is still a huge problem of sexual assault involving licensed minicab drivers? Secondly, how many disabled groups has she consulted about this deregulation and can she tell us what they had to say about it?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

I personally have engaged more with disabled individuals rather than with groups, which were approached by the Law Commission as part of the consultation. But the Committee will understand the reality of what I have just described. Many Members of the Committee will have friends with disabilities or indeed may themselves have them, and they will recognise what I have just described. It is for the Committee to make its decision, but I think that noble Lords will recognise the particular set of problems and will empathise with those who have a disability.

Enforcement against an operator continues to be the responsibility of the local authority which licensed that operator. Where there is an issue of enforcement against a driver, again it is for the local authority which licensed that driver to enforce. However, to make life easier and help things to work more smoothly, in some places around the country local authorities have concordats between each other so that they can delegate enforcement powers and thus make the process more simple and straightforward. Liverpool and South Bucks already do this, and I would think that it is a logical direction for many local authorities to go, not because enforcement is difficult but because it is even easier if ongoing relationships with neighbouring areas where subcontracting may take place are developed. We already have vehicles from out of area coming into area. When you order your private hire vehicle, you may be sending it out of area, so cross-boundary issues arise on a regular basis even as it is. As I say, some areas have decided that the sensible way to deal with this issue is to work together with a concordat between them.

The noble Lord, Lord Greaves, raised one issue which I thought was interesting and is one that I will take away and think about, and that is the issue of disclosure; that is, where an operator looks at the cars he has available, cannot find a vehicle available in his own company, and therefore looks elsewhere. That is something I will take a look at. However, I want to make it clear that there are real anomalies which we have to deal with. At the moment we have a silly situation in some parts of the country where related companies cannot subcontract to each other. Although they may be part of the same company, one branch will be licensed in one area and the other in another area. That, quite frankly, is one of the silly anomalies that we want to get rid of. Also, because the company you call and the individual you call is liable throughout, in order to uphold its reputation the company will make sure that the people it subcontracts to meet its own standards and are reputable. We have just heard today that very many people will turn to a company which they consider to be reputable. The notion that such a company would subcontract to drivers who let the company down, drive customers away and ruin its reputation is, I suggest, reasonably far-fetched. Under all circumstances, the driver to whom the business has been subcontracted has to meet licensing standards, and that is something we should not forget.

These are, frankly, two relatively small measures. The subcontracting issue is particularly helpful for someone with a disability who needs to call for a vehicle when many of a company’s cars within the area are already taken. We have to take that seriously. I go back to the issue on licensing. The three-year period is a reasonable standard that is used by many local authorities. It delivers the same level of safety that we see in other local authorities so why not relieve of an extra burden those who function at the margin in terms of income, if there is no safety price to pay?

Clause 11 agreed.

Clause 12: Private hire vehicles: sub-contracting

Division on whether Clause 12 should stand part of the Bill.

Contents 221; Not-Contents 175.

Clause 12 agreed.

Division number 3 Deregulation Bill — Committee

Aye: 219 Members of the House of Lords

No: 173 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

House resumed.

Clauses 1 to 12 and Schedules 1 to 3 of the Bill reported with amendments.