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31 Jan 2003 : Column 1167—continued
Mr. Bellingham: The hon. Gentleman is right to focus on that aspect. He will be aware of my interest in the Potters Bar train disaster which occurred approaching a year ago—the train was heading into my constituency. We are still waiting for the HSE report on that tragedy. There has been much speculation that charges of corporate manslaughter could be levied against the contractors, Jarvis. There is much uncertainty, so does the hon. Gentleman agree that it is time that the HSE
published its final report? Furthermore, the Government really need to look into the situation as regards corporate manslaughter.
Dr. Cable: Indeed. The hon. Gentleman is right. I was making exactly that point. However, when pursuing such cases, the problem for the authorities is determining the individual—in Jarvis, in this instance—who would face prosecution. There is a difference between prosecuting an organisation and an individual. It is extremely difficult to identify the relevant person in an organisation; the Government need to address that issue, as it is not tackled in the Bill.
The Bill is not helpful on the problems relating to employer liability on which I initiated an Adjournment debate about six weeks ago. As has already been pointed out, many companies face massive increases in employer liability insurance charges. Some companies have been cut off altogether—
Mr. Nicholas Brown indicated dissent.
Dr. Cable: The Minister shakes his head, but surveys undertaken by chambers of commerce show that about one in eight or one in 10 companies face difficulties in getting any liability cover at all.
Mr. Brown: That is an important point and I should be grateful if the hon. Gentleman would drop me a note listing companies that to his certain knowledge are wholly uninsurable. My understanding is that the problem relates to rates for insurance rather than its availability.
Dr. Cable: My impression is that both are involved, although I shall be happy to correspond with the Minister and send him the record of my debate where I made relevant references.
Mr. Hoban: Is the hon. Gentleman saying that there are problems both with the rates charged for cover and because insurance companies are withdrawing capacity for employers' liability insurance from the market?
Dr. Cable: That is my point. Employers liability cover is not being withdrawn maliciously; it has been withdrawn because the market cannot fulfil it in certain sectors, such as quarries, for example, where the safety factor is especially difficult to cover. Although the Minister disputes whether this is a serious issue—it is—I can envisage difficulties with the Bill because companies would be open to fines and workers could be dismissed even though they cannot obtain satisfactory insurance. That is not satisfactory.
Mr. Brown: I do not dispute the fact that that is a serious issue, but I am trying to get the hon. Gentleman to say whether the problem relates to the absolute unavailability of insurance or to the increased premiums. In other words, the problem is that insurance is available, but at a much higher rate.
Dr. Cable: I shall happily guide the Minister to the surveys that have been carried out, I think, by an amalgamation of chambers of commerce.
Mr. Bellingham: It is not just a question of the premiums going up very sharply; a number of
companies have had to restrict greatly the categories of business that they continue to conduct. For example, a small specialist construction firm on the south coast requires £5 million of cover to secure contracts from its regular customers, but it has been able to secure only £1 million of cover this year at a cost of £8,000, whereas £12,000 bought £10 million of cover last year. That specialist company is now contracting out work and getting rid of employees. It is facing a crisis, as are many other companies.
Dr. Cable: That is an accurate description of what is happening. I know that the Minister is supervising an inquiry in his Department, which is very welcome, and which is due to report very soon, perhaps in March. I hope that, when that report is available, we shall be provided with a good analysis of the problem, why it has arisen and the best way to deal with it. Perhaps then the Bill will be seen to be helpful, but I think that the problems lie elsewhere.
The conduct of the insurance industry itself should be considered. Despite the fact that the life insurance industry is in terrible trouble, normal commercial insurance is currently rather profitable. It is worth considering how the insurance companies have dealt with their clients, because that has caused a good deal of hardship and disruption.
As has already been mentioned, "no win, no fee" litigation is also imposing costs. That is partly an issue for the Government because of the way in which the Lord Chancellor's Department, in effect, sets the compensation tariff. That interlocking series of policy issues must be addressed. I am not sure whether the Bill is helpful, but we need to wait for the outcome of the Minister's inquiry before we decide what is the most productive way forward.
I should be happy to support bits of the Bill, but I am less happy with other provisions. However, at least we would benefit from considering the Bill in Committee to find out how it could be augmented and improved.
1.37 pm
Mr. Henry Bellingham (North-West Norfolk): I certainly congratulate the hon. Member for Scarborough and Whitby (Lawrie Quinn) on introducing the Bill, which he has obviously put a great deal of thought and effort into. I am a retread, and those of us who have been involved with previous private Members' Bills know only too well that they require a great deal of effort and a huge of amount of consultation with different organisations and bodies. There is no question but that the hon. Gentleman has put a lot of work into the Bill.
It is a great pity that the Company Directors' Performance and Compensation Bill was not given a proper debate. It is bizarre that a rather scurrilous, squalid attempt was made to scupper that Bill, which, I am afraid, succeeded. I do not understand the motives for that.
Mr. Deputy Speaker: Order. We are now considering this Bill, and the hon. Gentleman ought to deal with it.
Mr. Bellingham: Of course I will, Mr. Deputy Speaker, but it is very important to put the Bill into
context. If the other Bill had not been scuppered, we would still be discussing it. I wish to make it clear that that was not the fault of the hon. Member for Scarborough and Whitby; he is a very genuine, honest person, and I am sure that he had nothing whatever to do with what happened.
Mr. Bellingham: He is a decent person, as my hon. Friend the Member for Buckingham (Mr. Bercow) rightly points out.
All that is history, but I am sure that there will be various post-mortems into what happened, and I hope that my hon. Friend the Member for Tunbridge Wells (Mr. Norman) is given a change at some stage to reintroduce his Bill.
The wider economy forms the background to the Bill, because no Bill that affects businesses, particularly small and medium-sized businesses, can be judged without taking a very close look at it. There is no doubt in my mind that the current macro-economy is starting to stall as part of the global slowdown: we need only look at the way that stock markets have reacted in the past 11 days or so. Very serious concerns exist about the fragile nature of our economy and we must examine the Bill in that context. As my hon. Friend the Member for Fareham (Mr. Hoban) has made clear, the Bill will have regulatory implications. All businesses, large and small, are very concerned about the forthcoming national insurance increases, which will take place in the spring, around the time that this Bill would be introduced. The avalanche of red tape and bureaucracy that is piling down on businesses is having the biggest impact on corporate Britain at the moment.
We all know that a framework of health and safety legislation is needed. It is interesting, however, that while in the United States every effort is being made to combat the fall in consumer confidence and in stock markets by examining measures to reduce regulatory burdens and to cut taxes, Britain and the EU appear to be going in the opposite direction. What is unfortunate is that the UK supply side economy was previously the envy of Europe. In terms of burdens on business, our regime was probably the most sensibly balanced anywhere in Europe and, consequently, we attracted a great deal of inward investment. Obviously, that was important to small firms. That was why, in the opinion of many pundits and experts, this country has done so well over the past few years. We had an excellent supply side, and a Chancellor who, until recently, had control of public finances. We had flourishing small firms and a light regulatory touch that was very much part of the reforms introduced by the previous Government.
As for red tape and burdens on business, taken individually, they are not showstoppers or deal breakers, but the drip, drip, drip—the accumulated impact—of those burdens is starting to have an effect. Some of those burdens on business are manifestly home-grown. The Employment Relations Act 1999 has led to a flurry of statutory instruments; indeed, I was involved in considering one of those—the regulations on maternity, paternity and adoption—the other day in Committee. Compliance with such regulations is fine for bigger organisations—firms such as ICI or SmithKline
Beecham—which have large human resources departments. However, a small company, which will also be impacted by the Bill—
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