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Mr. Eric Forth (Bromley and Chislehurst) (Con): This may be a premature question, but can the hon. Gentleman tell us whether any of those organisations or others commented on clause 2, which deals with employers' insurance offences? One of my reservations is that, given the well known difficulty that many small firms have in securing insurance cover, the penalties in the Bill are very harsh indeed. Has the hon. Gentleman encountered any opinions on that aspect of the Bill?

Mr. Love: As I said, I did receive comments on that issue, but I should like to return to them after I have explained the Bill more fully. Perhaps the right hon. Gentleman will pursue his point again at that time.
 
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The Bill recognises that we live in a world of much greater uncertainty and risk than in 1974 and it is designed to meet public concern by updating the 1974 Act. It does so by removing the cap, currently standing at £5,000 for a range of less serious offences, on the level of fines for breaches of health and safety law. It will extend the possible punishment of prison custodial sentences to all breaches of health and safety laws. Currently, that applies to breaches of only a few sections of the 1974 Act, but under the Bill it could apply to all sections. Finally, to deal with the point raised by the right hon. Member for Bromley and Chislehurst, the Bill significantly increases the fine for not having a valid employer liability insurance certificate.

Mr. A. J. Beith (Berwick-upon-Tweed) (LD): In case a different impression is created by another right hon. Member, it is important to say that many of us regard that provision as a crucial part of the Bill. I have had experience in my constituency of an owner of a private mine not having valid insurance when an accident took place in that mine. That meant that compensation from an insurance company was not forthcoming.

Mr. Love: I thank the right hon. Gentleman for that. Employers, and especially small businesses, have had some difficulties in gaining employer liability insurance, which is undeniably a contributory factor to some of the difficulties that companies have faced. However, there is also a considerable amount of evasion in respect of employer liability insurance. The right hon. Gentleman mentioned a particular case, which I believe would be covered by the Bill.       

The limited debate so far has reflected the fact that Parliament recognises the need for corporate accountability and social responsibility, and that that must involve safeguarding the health and safety of employees. The Bill is an attempt to respond to those needs by reflecting the realities of today's workplace, where tragedies do unfortunately occur. For example, the TUC drew my attention to a case in which Bournemouth magistrates imposed a fine on a company on two charges, after a man was paralysed when 2 tonnes of glass tipped off a trolley that the company had been warned was unsuitable for the purpose.

Sadly, current British employment law allows rogue companies—I accept that it is a very limited number—to continue to ply their trade. Surely, it must be unacceptable that unscrupulous, illegal operators can treat workers in this way without any real fear of intervention. The change must start at the sharp end. We must put in place an effective deterrent so that employers can no longer factor in potential fines when making contractual bids, knowing that they can still make a profit even if they are fined under the 1974 Act. These scams must be stopped, and the Bill is an attempt to do that.

We must bring the law up to the standard of the 21st century. Employees have a right to expect not to be injured or maimed when they go to work, or at worst, to find that the workplace leads to an early grave. It is the duty of Parliament to tighten up our health and safety laws and to prevent tragedies such as we have seen in recent years. I hope that it will reflect that concern.
 
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The consequences of our inadequate health and safety legislation are harrowing and grave, and rogue employers must not be allowed to cheat workers out of a safe working environment.

There is widespread agreement on that, but some concerns remain among employers' organisations. The CBI's head of environmental affairs said that

"financial penalties for health and safety offences should be in line with the penalties for other offences and set at a level to deter offenders. However raising the limit from £5000 to £20000 could have a disproportionate effect on small and medium sized enterprises."

Similarly, the Federation of Small Businesses, in its submission on employers' liability insurance, said that it is

"one of the biggest issues facing small businesses today . . . Penalising small businesses in this case will not deter the cowboys, who consciously choose to operate illegally, but will impact heavily on small employers who want to behave responsibly, but cannot do so."

Gregory Barker (Bexhill and Battle) (Con): In the hon. Gentleman's discussions with industry, has he reached conclusions on whether those employers who have insufficient or no liability insurance are in that position through error, because they are financially hard-pressed and cannot keep up the payments, or simply because they are unscrupulous and have no intention of getting adequate cover? What is the breakdown and the balance between the three?

Mr. Love: I cannot claim to have carried out a comprehensive consultation exercise, so I cannot answer in detail. Undoubtedly, the representative organisations feel that small businesses find it difficult to get the insurance, but there is a body of evidence from cases that come to the courts suggesting that negligence and evasion are also factors. I hope that the Bill will be able to differentiate the two, to be sympathetic to the responsible employer, small business or not, but to crack down hard on those who are simply evading their responsibilities to their employees.

The Institute of Directors tried to pilot some rather innovative ways of responding to some of these issues. In a recent speech, its health and safety representative said:

"The Centre for Corporate Accountability has also suggested a system of proportionate fines for convicted companies . . . Instead of a significant fine, an executive  . . . could be sent on an approved course. Putting a firm out of business surely cannot always be the best remedy . . . The emphasis surely ought to be about helping improvement come about."

That sums up the reaction to my Bill. I was slightly surprised that so many caveats were expressed by a number of the organisations that I contacted, but the positive thing was that there was no outright opposition to the thrust of my Bill. I have quoted sentences from responses that show willingness to support health and safety legislation and to ensure that breaches receive appropriate sentences.

We should be able to explore the issues in Committee, including the appropriate fines for different types of breach. We should be able to explore the role of custodial sentences, too. There is some concern,
 
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especially among small businesses, that taking an owner/manager away from a business might well prejudice whatever business and employment it generates. For that reason, we must recognise the sensitivity of such roles.

As the right hon. Member for Bromley and Chislehurst (Mr. Forth) said, there are issues concerning employers' liability insurance and we need to recognise sensitive points for small employers while also cracking down on those who simply evade their responsibilities. We shall have only limited time in Committee, but I think that the Bill can do that. We can bring back to the House a better Bill than the one before us so that we can make progress.

There can be two reasons for objecting to my Bill. I do not know which of them the right hon. Member for Bromley and Chislehurst will choose. He may make a principled objection to private Members' Bills, and there is nothing I can say to that, except that it seems strange to take part in a process while disagreeing fundamentally with it.

On the other hand, there are concerns, expressed across the House, about regulation. As secretary of the all-party small business group, I understand that regulation is continually raised by businesses, particularly small ones. The Bill does not seek to extend regulation, which already exists under the Health and Safety at Work, etc. Act 1974. The Bill seeks to make that existing regulation more effective, and the House, given the changes of the past 30 years and the serious problems that have brought business into disrepute in recent years, should be alert to the need to update legislation.

The Bill will make a significant contribution to improving standards and getting rid of some of the cowboy practices that a small number of businesses employ. It is a small number, but those businesses can taint the rest of the business community simply by wilfully disregarding their duties to protect their workers from the dangers and risks in the workplace. I commend the Bill to the House.

1.38 pm

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