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31 Jan 2003 : Column 1160—continued
Mr. Bellingham: I thank my hon. Friend for giving way in his superb debut on the Front Bench. He talked about premiums doubling, but has he heard about a family-run steel fabrication business in the Deputy Prime Minister's constituency that has just made five people redundant and is likely to cease trading because its combined public liability and employers liability bill has increased from £3,600 to £28,000?
Mr. Hoban: The scale of the increase that my hon. Friend has just outlined will, I am sure, trigger a request for clarification from the Hansard reporters, as it seems beyond belief that a company can face such an extensive increase in its premiums. That highlights the problems that businesses face as premiums go up. Some employers will decide to reduce the scale of their operations, as the steel fabricator in the Deputy Prime Minister's constituency has done, by reducing the number of employees. However, some employers will make an ill-judged if well-intentioned decision not to cause hardship among their employees and will avoid those huge increases in premiums by not paying them. That is a regrettable decision, and I do not believe that businesses should make it. If they are interested in the long-term welfare of their employees, they need to ensure that liability insurance is in place, and should not base their decision on short-term financial gain.
Employers face difficult decisions. Faced with that trade-off, should they make staff redundant or cancel their employers liability insurance? People who cancel their insurance will be caught by the Bill's provisions.
Mr. Gray: The conundrum that my hon. Friend has described particularly affects the stone-quarrying industry in many parts of England, including my constituency. Employers will not lay people off, but they cannot pay the higher premiums. Many of them are seeking to set up a co-op and become joint owners of a business to try to see the problem off, but that means that they are not paying insurance and are taking on the risk themselves, rather than giving it to the company. Does my hon. Friend not agree that that too is regrettable?
Mr. Hoban: My hon. Friend has raised an important and worrying issue for businesses and their employees. Business pressures are forcing employers to look at measures such as setting up co-operatives or cancelling their liability insurance, which will lead to a dangerous trend in the insurance market. I am grateful to my hon. Friend for bringing that issue to the attention of the House.
Hon. Members have spoken about problems that they have encountered in their constituency or that they are aware of through their business contacts. The Engineering Employers Federation released details last December of its experience. Many of its members have faced premium increases of up to 300 per cent. in the past year. In August 2002, the BBC's online service published an article entitled "Insurance woes hit small firms". It highlights the risk to which I referred earlier
and claims that because of rises in premiums, many firms continue to trade without cover, in contravention of UK law.
Mr. Bellingham: The Under-Secretary of State for Trade and Industry, the hon. Member for Edinburgh, South (Nigel Griffiths), told the House on 5 December that the Government had set up a comprehensive review of the matter and would report to the House. As the Minister for Work is present today, would it not be in everyone's interest if he made a speech—quite a long speech, we hope—telling us how that review is going?
Mr. Hoban: I am grateful to my hon. Friend for raising the matter. With his usually prescience, he highlights the point that I intended to raise next. I am concerned that the provision will have an impact on employers liability insurance. I believe that we should consider the matter carefully and wait until the Department for Work and Pensions has reviewed employers liability insurance and see the conclusions that it has reached. The House should not act precipitately.
The Minister for Work (Mr. Nicholas Brown): I welcome the hon. Gentleman to his Front-Bench responsibilities. It is a delight to see him at the Dispatch Box. I will make a deal with him. If Conservative Members do not talk out the Second Reading of the Bill today, I will serve on the Standing Committee that considers the Bill and we can have a comprehensive discussion of these important matters relating to employers liability insurance. In Committee there will be a chance to question me, not just on issues of principle, but on issues of detail. That is a very fair deal.
Mr. Forth: The Minister did not make such an offer on the previous Bill.
Mr. Nicholas Brown: If the hon. Member for Fareham (Mr. Hoban) will allow me to take an intervention—
Mr. Deputy Speaker (Sir Michael Lord): Order. To keep ourselves in order, the Minister ought to let the hon. Member for Fareham (Mr. Hoban) respond to his intervention, before he responds to the next one.
Mr. Hoban: Thank you, Mr. Deputy Speaker, for your protection. As hon. Members have remarked, it is my first occasion at the Dispatch Box, so I am grateful for your direction to ensure that we remain in order.
We would all welcome a detailed explanation and discussion of the Bill in Committee, but it is important that we debate the issue in full on the Floor of the House before we proceed to Committee stage. Only a limited number of hon. Members can serve on the Committee, and the Bill is clearly of interest to a large number of hon. Members, especially Conservative Members. We need to explore the issues in full. I will allow the Minister to intervene again.
Mr. Brown: I am grateful to the hon. Gentleman for giving way. He makes a perfectly fair point. I would be happy to return to these matters, either by giving a full
report to the House on our review of employers liability insurance later in the spring or early summer, or at the Report stage of the Bill.The shadow Leader of the House seemed to suggest in his sedentary intervention that talking the Bill out was a quid pro quo for the previous business not being quorate. May I gently say to the right hon. Gentleman and the rest of the House that it is always open to the parliamentary Conservative party to make sure that the House is quorate for business that the Opposition consider important.
Mr. Hoban: Those of us who have been in the House this morning witnessed the way in which Labour Members used parliamentary procedure to stifle discussion of a Bill that some have characterised as an attack on fat cats. Perhaps it is all the more ironic that it was Labour Members who prevented discussion of that Bill. However, I am conscious that I would be deviating from order if I continued down that track for much longer.
Mr. Gray: My hon. Friend has been most generous in taking interventions. Does he not find it extraordinary to hear a Minister of the Crown begging from the Dispatch Box for the Bill to be allowed to go through today and not be talked out, as he calls it? Of course we have no intention of doing that, as we have important things to say. Twice the right hon. Gentleman stood at the Dispatch Box, begging. If it is all that important to the Government, why do they not just make it a Government Bill?
Mr. Hoban: My hon. Friend makes a valid point.
Mr. Hoban: My right hon. Friend is right. The Bill is about the protection of employees, but I point out that Labour Back Benchers—I would hate to think that the earlier use of a procedural device was inspired by the Government or the Labour party's usual channels—killed a Bill about the protection of shareholders, who are often workers who hold shares in their firms or pensioners. We have today had opportunities to talk about protection for different classes of people, but it is disappointing that one of them has been quashed.
Mr. Brown: That is not true. Employers operating legitimately are protected by the penalty regime. The penalties fall only on those who have been taken to the courts for cheating.
Mr. Hoban: Without wishing to engage in a ding-dong about this particular aspect of the Bill, I point out that when we discussed the Bill previously, it was seen as a deterrent. It was seen not as protecting employers, but as beating them around the head if they failed to comply.
Mr. Bercow: My hon. Friend is developing his arguments powerfully, but does he agree that this debate has a lop-sided character? If the hon. Member for Scarborough and Whitby had been at liberty properly and in detail to defend some of the excellent arguments that I think he had intended to develop and had not been
subject to the selfish parliamentary thuggery of the hon. Member for Hendon (Mr. Dismore), who is now noticeably absent from his place, many of our concerns might have been allayed at a much earlier stage in the proceedings. The hon. Member for Hendon is guilty as charged.
Mr. Hoban: My hon. Friend's intervention requires little or no answer from me.
Before we were diverted briefly into discussing protection of different classes of people who work for the same firm, whether they are employers, shareholders or employees, we were discussing employers liability insurance. Clause 2 increases the penalty for employers who do not have employers liability insurance. I explained why there are pressures in the insurance market that have resulted in employers ceasing to hold such insurance. My hon. Friend the Member for North-West Norfolk (Mr. Bellingham) pointed out that the Department for Work and Pensions is reviewing the matter. The Minister for Work said that at a later stage he would expand on the results of the Government's review, but I was disappointed when he said that the results would be available in late spring or early summer. Given the increase in employers liability insurance that people in the insurance sector are predicting, it is clear that, as a result of higher premiums, a great many more businesses will go out of business, more employees will be laid off and more employers might be tempted to take the foolish route of ceasing to have such insurance.
It would be better for the Government to release the results of the review sooner so that we can see whether the increased penalties that the Bill sets out for those who do not hold employers liability insurance are appropriate, given the current market conditions. It is not only the Government who are inquiring into employers liability insurance; I understand that the Office of Fair Trading is engaged in a similar review. It is important to wait for the results of both those reviews. Given the importance of employers liability insurance to employees and employers, I wonder whether a private Member's Bill is the appropriate vehicle for tackling the subject.
I want briefly to refer to a couple of other clauses. I am conscious that Conservative Members want to participate in the debate; I do not know whether that applies to Labour Members. The hon. Member for Scarborough and Whitby did not mention proposed new section 5(4) of the Employers' Liability (Compulsory Insurance) Act 1969, which clause 2 would introduce. It reconsiders the time for bringing a prosecution for breaches of health and safety rules. Currently, a prosecution can be brought within six months of the offence occurring. The Bill would change that rule and provide that such an offence could be tried
- "within the period of five years beginning with the date on which the offence is alleged to have been committed, and . . . within the period of six months beginning with the date on which evidence sufficient in the opinion of the prosecutor to justify the proceedings comes to his knowledge."
The explanatory notes claimed that the Government would incur no additional financial cost. However, I wonder about the impact of the change. I am worried
that employers and the Health and Safety Executive might be exposed to a series of vexatious claims by employees, who would know that they had a longer period in which to claim and might think up opportunities to do that, not through interest in their well-being but to create a problem for the employers. One can imagine, for example, an employee who had been dismissed thinking back to an incident that took place three, four or five years ago and bringing it to the attention of the HSE. The clause could be used to take up a case with the HSE, which would need investigation by the inspectorate and require employers to go through their records and spend time appointing a solicitor, taking legal advice and perhaps employing one of the health and safety consultants to whom I referred earlier.The Bill provides a window of opportunity for a backlog of claims.
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