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John Reid: I do not think that that is correct. People can already be held to account for gross negligence that results in the loss of life, or in any other substantial loss, although a certain level of proof is required. The Bill introduces the concept of corporate manslaughter, which means that a corporate organisation can be held to account if its systemic and institutionalised failures and negligence across a range of activities are shown to have led to a death.

I will go further than that. If the House passes this Bill, it will be possible to take a corporate organisation to court, expose it to public scrutiny and impose on it a guilty verdict and a substantial, unlimited fine, while individuals can be tried simultaneously for gross negligence leading to manslaughter. The hon. Lady’s premise is therefore wrong and I assure her that the Bill will not diminish the right to deal with individuals.

Mr. Grieve: Will the Home Secretary give way?

John Reid: I shall give way first to my hon. Friend the Member for Warrington, North (Helen Jones) and then to the hon. Gentleman.

Helen Jones: My right hon. Friend is right to argue that all people deserve the protection of the law in this matter, but the Bill makes an exception for unincorporated bodies, such as large partnerships. Will he undertake to look again at the matter in Committee, given that it is already possible—under the Companies Act 1985, for example—for such bodies to be prosecuted? We need to provide equal protection for all employees, regardless of the nature of the organisation that employs them.

John Reid: It will, of course, be possible to look at all such matters, including that one, during the House’s deliberations on the Bill. The current law does not extend to unincorporated bodies. Evidence from the Health and Safety Executive indicates that only 2 per cent. of the prosecutions that it mounts are against unincorporated bodies—

Mr. Grieve indicated dissent.

John Reid: I am talking about the Bill before the House today. I hope that that helps the hon. Gentleman to calm down.

The evidence is that only 2 per cent. of HSE prosecutions are taken out against unincorporated bodies. We can discuss the matter that my hon. Friend the Member for Warrington, North raises, but typically the bodies to which she refers are smaller businesses such as building firms, sole traders and so on. Individual prosecutions are likely to be possible in cases involving such bodies, and in fact most individual prosecutions have been brought against the very firms to which she has referred. There is a gap, as I think the whole House accepts, in taking larger incorporated organisations to task for systemic failures across the organisation that have sometimes resulted in a considerable number of deaths, as I pointed out. That is where we have concentrated our efforts.

Several hon. Members rose—

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John Reid: I should like to make a little progress. I have been speaking for 19 minutes but I have reached only page 7 of 24. I will attempt to move on quickly.

The Government are determined to make corporate manslaughter laws just, and the Bill aims to create a clear and effective criminal offence. Our approach is based on recommendations from the Law Commission and on extensive consultation, including with trade unions, industry and those representing the victims of work-related death, although I realise that we have not agreed on everything in those consultations. In particular, I am indebted to my right hon. Friend the Member for Southampton, Itchen (Mr. Denham) and members of the Select Committees on Home Affairs and on Work and Pensions who carefully scrutinised the legislation in draft. We have adopted a number of the Committees’ recommendations, although not in every particular, and they have had an important influence on the final shape of the Bill in several areas.

What the Bill does can be stated simply. The new offence of corporate manslaughter represents an advance in two major ways. First, it provides a new test for the application of the corporate manslaughter offence to companies that will allow the courts to look at collective management failure within an organisation, thus enabling, for the first time, a proper examination of corporate negligence, on the corporate scale.

The Bill goes further and, secondly, removes Crown immunity. That is a far-reaching and historic development. For the first time, Departments and other Crown bodies will be liable to prosecution in the criminal courts. I understand that there is an argument about the extent and scope of the measure, but I hope that we have got it right by excluding public policy matters. Nevertheless, this will be a major step in removing Crown immunity from Departments and other Crown bodies.

On the test for liability, the new offence of corporate manslaughter radically modifies the law. It moves away from the question of who managed the company to the question of how the fatal activity was managed—a significant shift that is more than mere semantics. No longer will a successful prosecution depend on proving gross negligence by isolated individuals. Prosecutors will be able, for the first time, to focus on collective failure, as I said earlier.

Stewart Hosie (Dundee, East) (SNP): Will the Home Secretary give way?

John Reid: In a second.

As the intention is to target truly corporate negligence, however, it would be wrong if organisations were prosecuted on the basis of isolated or unrelated management failings at relatively low levels of the organisation. For that reason, the new offence requires there to have been gross failure by senior managers. Again, I understand that people will want to discuss that point during our deliberations and we shall always be prepared to undertake such scrutiny and will be able to go some way— [ Interruption. ]—I shall give way when I have finished this point.

When we published the Bill in the summer, many people, including the scrutiny Committee, felt that the
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test of liability was too narrowly drawn and that the new offence might as a consequence fail to rebalance the law in the direction of corporate rather than individual negligence. It is critical that the new offence has public confidence, so we are taking those objections seriously and will table amendments in Committee. I will write to the right hon. Member for Haltemprice and Howden (David Davis) and to the hon. Member for Sheffield, Hallam (Mr. Clegg) and their colleagues shortly to outline our proposals in greater detail, but I hope that at least on this issue they will go some way towards meeting the reservations expressed when we introduced the Bill.

David Howarth (Cambridge) (LD): Will the Home Secretary give way?

John Reid: I will give way to my hon. Friend the Member for Reading, West (Martin Salter) and then to the hon. Member for Dundee, East (Stewart Hosie).

Martin Salter: The Home Secretary will be aware that, in October 1999, 31 people died in the horrific Paddington train crash and that many more were seriously injured, including a number of my constituents. After pleading guilty to health and safety offences, Thames Trains got away with a £2 million fine. That is a fraction of the money that the directors made from the two management buy-outs that have occurred since rail privatisation. If this very welcome measure had been on the statute book at the time of the Paddington disaster, what different outcomes could the survivors of that crash have expected?

John Reid: I agree very much with what my hon. Friend says, and two provisions would be particularly relevant to the case that he mentions. We have already discussed the first of those provisions—unlimited fines—and the second is, of course, that on remedial orders. Fines and compensation orders are usually the most effective ways to penalise companies that are found guilty of criminal offences, but I fully recognise that financial penalties alone—the point that he makes—may not always be enough to change undesirable business behaviour.

Of course, alternative sanctions have been explored, because the issue goes wider than just corporate manslaughter. The Macrory review is conducting a comprehensive investigation into corporate sanctions. Its final report is due out this autumn and will identify a number of options, including corporate rehabilitation orders, community projects and publicity orders. However, the unlimited fines and the remedial orders in clause 10 are particularly appropriate to the subject that my hon. Friend raises.

Mr. Grieve: I am grateful to the Home Secretary for giving way on this point, because the clause on remedial orders is the only one that seems to be entirely otiose. Under the Health and Safety at Work, etc. Act 1974, the availability of prohibition and improvement notices is so powerful a regime that I find it very difficult to understand how a remedial order can possibly add anything to the powers available to the Health and Safety Executive. I say this in a spirit of conciliation, but I do not think that we should put on
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to the statute book orders that, in fact, will have no practical significance, because such powers already exist.

John Reid: We certainly believe that we are supplementing and adding to the measures that the hon. Gentleman mentions, but this is a perfectly legitimate issue for discussion and deliberation during the passage of the Bill. However, we would not be taking this action if we did not think that it added another dimension to that which already exists.

Stewart Hosie: The Home Secretary will be aware that, as a result of a Sewel motion, the Bill covers Scotland, and he has mentioned collective failure on a number of occasions. What is the practical difference between the Bill and the current Scottish position, whereby it is possible to convict a company of a common law crime if the prosecution identifies a group of individuals collectively who were deemed to be the company’s controlling mind, whose acts could be said to be those of the company and who were guilty of that crime? What practical improvement will the Bill provide?

John Reid: The hon. Gentleman will know the history. An expert group was set up in Scotland, and the Scottish Executive and the Government amicably decided that the matter would be more appropriately dealt with under health and safety legislation. Of course, that is an issue with which we deal, but we have listened very carefully in framing our general Bill to address the points that were made in Scotland.

The hon. Gentleman talks about a group of individuals. I understand, although I will stand corrected in correspondence with him, that it must be illustrated that each individual in that group bears responsibility. Our understanding is that the Bill will supplement that dimension by allowing the consideration of the institutionalised, systemic fact of failings at a lateral level, not just among the top people and not just where individual responsibility can be illustrated in every case. If the Bill were to become law and a systemic failure occurred, it could be taken into account when considering a breach of the law.

As I told the hon. Member for Beaconsfield (Mr. Grieve) in answering the last question, the Bill adds a dimension and supplements and strengthens the existing law, although I am, of course, aware that there are those in Scotland, as there are those in England, who want us to go further. Although we think that we have got the balance right, we will, of course, listen during the passage of the Bill.

David Howarth rose—

Mr. Edward Davey (Kingston and Surbiton) (LD) rose—

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): Will my right hon. Friend give way?

John Reid: Yes, I will, but there are two Members on the Liberal Front Bench, and I like to hear both points of view from the Liberals.

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Hon. Members: All three.

David Howarth: Yes, all three. May I return the Home Secretary to the question of the test for liability and ask him to address another possible weakness in the way that the provision has been set out? The test for liability connects the crime of gross negligence with the duty of care in civil law. Does that mean that the crime that we are discussing today would not apply in the cases of the cockle pickers or the 58 illegal immigrants who died in the back of a lorry? The courts might well say that there was no civil duty of care in those cases.

John Reid: No, I do not think so. We have retained the duty of care because it is already extant in law and because we believe it would reinforce the case against employers. Indeed, when being briefed on the Bill, I asked what would happen if a train that crashed after coming off the tracks killed not only passengers—the company would clearly have a duty of care to them—but bystanders. The legal advice on the Bill that I have received is that if that could reasonably have been foreseen, the duty of care would still apply in that case. I do not think that the position is quite as simple as the hon. Gentleman makes out. The retention of the duty of care is intended to strengthen the Bill rather than weaken it.

Mr. Davey: I hope that the Home Secretary can write to my hon. Friend to clarify that because we believe that the case of Wacker v. Regina suggests that the Home Secretary’s advice to date would not cover the case of the cockle pickers.

May I take the Home Secretary back to the important point that he made a few minutes ago when he said that he would write to those on both Opposition Front Benches about the test in the Bill with respect to senior managers? It is important that he give the House a little more indication of what changes the Government have in mind on that point, as it is fairly crucial to whether the Bill will have the effect that the Government claim it will. Many people have commented on the Bill, which suggests that the senior manager test will have the same identification problem as the previous common law offence. Can the Home Secretary assure the House that the test will be got rid of and that the provision will apply in respect of failure by the corporation as a whole, as opposed to failure by just senior managers?

John Reid: I cannot assure the hon. Gentleman that the test will be got rid of. However, in the spirit of compromise to which we are always urged by the Liberal Democrats, I can say that we are looking at the issue again. As I said earlier, this is one of the points about which we want to write to him and his colleagues, as well as to Her Majesty’s official Opposition, with a view to widening the test. When we introduced it in the summer, I recognise that people had reservations about it, so we are prepared to consider it again.

I express no view on the case of the cockle pickers, but I tried to be clear that we did not accept the need to remove the test on duty of care. It is the basis for the current law and we do not see a compelling case for changing it. I merely point out that the offence will
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often involve a failure to act—not just an action, but a sin of omission as well as a sin of commission—and the provision needs to be underpinned by a duty to act. It strengthens the case in illustrating a failure to act if it is possible to point out that there was a duty to act in a certain fashion in the first place. That is why we believe the provision strengthens the Bill.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab) rose—

Mr. Clapham rose—

John Reid: I will give way to my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham), but then I will try to make a little progress—otherwise, I will get into terrible trouble.

Mr. Clapham: The hon. Member for Beaconsfield (Mr. Grieve) referred to prohibition orders under the Health and Safety at Work, etc. Act 1974 and suggested that there was probably no reason to have remedial orders, but are not remedial orders much more than prohibition orders? We are looking at systemic failing and even the possibility of looking at the method of work. In a difficult situation—for example, a complex situation of construction—one might even take into consideration the entire system of work with a remedial order. That would not be possible with prohibition orders.

John Reid: My hon. Friend has hit the nail on the head. That is precisely the point that I was trying to make. What we are suggesting goes beyond—it supplements—the prohibition orders that were mentioned earlier. Of course, we can discuss all that in Committee, but our understanding and our intention is to strengthen the existing position and to add to it, rather than just to replicate it.

I will summarise the points so far. Rather than framing the new offence solely in terms of the way an incident was managed by senior managers, we will reframe the test so that it takes into account the management of the fatal activity generally within the organisation. That is the point that was raised. However, the test would not allow a prosecution to succeed unless a substantial element of the organisation’s failure lay at a relatively senior management level. I accept that that is a point of balance, but it is something that we are willing to discuss. I also think that that will provide a more flexible approach than is currently in the Bill, because the test will encompass all aspects of the way in which an activity was managed in an organisation. But it will still need to be shown that a large part of the failure lay in the way in which the senior management of the organisation exercised responsibility. That will ensure that the offence remains targeted on truly corporate failings, rather than just individual failings.

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