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Disqualification from company directorships is another important issue. In Committee, the hon. Member for Hornchurch (James Brokenshire) referred to the complexity of companies nowadays; many of them have holding or offshore companies, and the nature of corporations is changing rapidly and becoming ever more complex. As my hon. Friend the Member for Manchester, Central said, disqualification from being a company director could be as much of a
penalty as a custodial sentence, because it would affect the persons livelihoodtheir ability to make profits and to make contracts would be seriously affected. Their disqualification would also have an effect on the company itself.
We need to make sure that the range of penalties available to the courts will provide sufficient deterrents in practice. We should realise how difficult it is for any prosecutor when considering whether to proceed with a charge, for the common-law offence of murder or for culpable homicide. Determining whether the evidence is sufficient is difficult, but there are cases where negligence falls just short of a common-law offencewhich is easier in Scotlandyet is of such seriousness and consequence to victims and their families that it is appropriate for the court to have the option of imposing a custodial sentence.
It is interesting to note the behaviour of FTSE 100 companies at present, given the threat of legal action in America that could result in custodial sentences. The latest case involves banking relationships in Iran. Although I do not agree with the American authorities about such actions, when people start arresting directors and talking about custodial sentencesas happened recently in respect of online gamblingit is amazing how quickly behaviour changes. When matters affect the top of the board of directors, each director manages to be extremely well informed. We need to be equally decisive in determining penalties for health and safety offences that involve peoples lives and welfare.
Tony Lloyd: My hon. Friend raises some interesting points. Although the cases to which she refers certainly concentrated minds, is there any evidence that people who saw the opportunity to make huge profits were deterred from taking on directorships by the fact that custodial sentences had been given, or did they simply raise their game as we might have expected?
Ann McKechin: My hon. Friend makes an interesting point. Companies changed their practices rapidly when people were arrested. I was reading in the weekend papers about the banking situation in Iran; urgent discussions are being held with major bankers, some of whom have already withdrawn from that country. The threat of a custodial sentence can be a strong deterrent and can change behaviour; it can concentrate minds in small, medium and large companies. I do not necessarily agree about the basis for that legislation, but a custodial sentence can be an effective deterrent and can change corporate behaviour.
Most companies try hard on health and safety, but we all know that there is a small percentage of rogue companies. We probably all have one in our constituencies and can point to cases where a companys behaviour falls very much below what we would normally expect. We need to address such behaviour fully. That also helps to keep health and safety issues at the front of the minds of other companies that may think that on the whole they do a good job on health and safety.
I recently travelled around with a health inspector for a day. We visited one factory that certainly seemed slack on a number of issues. It is not as if the company had not thought about health and safety; it just had not thought about it hard or systematically enough. It
is often the systematic failures that build up over a period of time. In the Transco case, it was not a matter of a bad decision taken one night leading to an explosion the next morning. Rather, it occurred as a result of a series of decisions over a long period, the cumulative effect of which was utterly disastrous.
We need to attack the rogue elements in business and attack sloppiness. We need a range of deterrents that adequately address all those particular concerns. At the end of the day, peoples lives are at stake. As the TUC said in its submission, it is not organisations that kill people, but the actions of the people in those organisations that result in death. That has to be the kernel of our decision today.
Mr. Doran: I had not intended to contribute to this part of the debate, but I believe that our discussion has been extremely important and it has helped me to focus on what I think are the key issues. I listened particularly to the contribution of the hon. Member for Beaconsfield (Mr. Grieve), but there is one fundamental weakness in his argument, as we would not be here today unless the common law had failed. The whole point of the Bill and statute generally is to fill the gaps or remedy the defects of the common law.
We need to reflect on the history of why we are here now and recall the disasters of the 1980s and 1990sKings Cross, the Herald of Free Enterprise, Bradford, Ladbroke Grove, Hatfield, Piper Alpha; I just scribbled down a few of the names. There was a common theme in every one of those cases: the failure to invest in health and safety, whether it be through technology, training, maintenance or whatever.
The case I know best is the Piper Alpha disaster, in which 167 men were killed offshore. Anyone looking at the report of Lord Cullen would see that it recorded negligence on that platform on a grand scale. If that operation had been the responsibility of and carried out by a single individual, there would have been a prosecution. However, we face a situation in our corporate culture today that makes it easy for people to hide behind the cloak of the company in respect of financial decisions to cut maintenance expenditure or a refusal to invest in safety training or whatever. My support, enthusiasm and campaigning for the Bill is intended to get behind that cloak. I firmly believe, as I said earlier, that unless we have some form of personal liability, we will fail. To be honest, I do not really care whether it is done through imprisonment or through the companies register, as suggested earlier by my right hon. Friend the Member for Southampton, Itchen (Mr. Denham).
Mr. Grieve: To be clear, the idea put forward by the right hon. Member for Southampton, Itchen (Mr. Denham) is achievable by the mechanism of section 37. It may require some tweakingthe Minister may tell me that it does not require very much tweakingof the rules of procedure for bringing prosecutions. It would be possible to end trials with the actual disqualifications of directors. I firmly believe that that is feasible and I would have no objection to it at all. However, it requires a breach of section 37 rather than some half-way house between that and manslaughter.
Mr. Doran: I accept the hon. Gentlemans point, but the fundamental point for me, having worked with the survivors and relatives of victims of a major disaster, is that those people feel very strongly that the directors of the company responsible for what happened to them have never been properly punished. Criminal law today, quite rightly, gives pride of place to the views, feelings and consequences for victims, but we are not achieving that if we fail to include individual liability in the Bill. It is important to place responsibility directly on directors to take safety much more seriously.
The best companies have a safety strategy and a safety assessment is made in respect of every decision that the company makes. I have sat in on board and other company meetings and seen that happen. It is important to say that we want to see that culture adopted throughout every company in the country. They should be forced to do that; and they are likely to do so only if they are forced.
Tony Lloyd: Reflecting on the marriage of section 37 with the Bill rather than the approach favoured by my right hon. Friend the Member for Southampton, Itchen (Mr. Denham), does my hon. Friend the Member for Aberdeen, North (Mr. Doran) agree that where the prosecuting authoritiesthe Crown Prosecution Service in Englandare involved, there is a fairly good chance that they would look into the substantive propositions to disqualify directors as part of the prosecution package? Frankly, the problem with the Health and Safety Executive is that it is often quite reluctant to move down a penal route; it prefers a more conciliatory route. That may be right in some circumstances, but there is a genuine cultural problem, which is why I urge my hon. Friend to resist going down the section 37 route.
Mr. Doran: That is an important point and I understand how the Health and Safety Executive operates. Its relationship with employers is important, but it does not take us away from the point that we need to find a way of applying pressure and enforcing the principle that a safety culture is essential inside every company. My hon. Friend the Member for Glasgow, North (Ann McKechin) made a very important point about the response of individual companies to gambling. I recall a similar type of experience many years ago when one of my constituents was imprisoned in America, even though what he did from the UKtrading with Libyawas legitimate in the UK. As soon as he set foot in America, he was arrested, convicted and imprisoned. That changed the culture of a lot of companies that operated in this country: they did not go to Libya any more. They got the message, even though it was perfectly legitimate in the UK for them to deal with Libya.
We live in a financial culture nowadays in which it is commonplace for directors to reward themselves even for failure in their companies. If we expect them to introduce the safety culture without having the sort of incentives that have been discussed, I believe that we are fooling ourselves. As I said in my earlier intervention on the hon. Member for Beaconsfield, I genuinely do not want to see prosecutions. If we have a string of prosecutions, we will have failed. It has to be about changing the safety culture, but unless we have the right tools and the right pressure, we will fail.
Jeremy Wright: The hon. Gentleman started his remarks by saying that we would not be discussing the Bill if the existing law had worked well. In that, he is, of course, right, but does he accept that what went wrong in the past was the fact that it was difficult to establish the responsibility of companies because of the controlling mind principle? That was the problem that the Bill was designed to deal with, and I believe that it is doing it rather well. Is not the danger of the approach favoured by the hon. Gentleman and other Labour Members that we forget that a criminal sanction has to be applied to an individual and that the standard of proof to which those individual must be held ought properly to be very high; otherwise, we will find ourselves in very dangerous territory? Is not the hon. Gentlemans approach effectively addressing the wrong problem with the wrong solution?
Mr. Doran: If the hon. Gentleman assures me that he is prepared to read it, I will send him a copy of the Cullen report. If he looked at the negligence of the company, Occidental, that was responsible for the tragedy, he would see a trail of responsibility. The hon. Gentleman is right that the fault could not be fixed on any one individual. I understand that; it is part of the problem of getting underneath the processes. I do not know whether even including criminal liability in the Bill would succeed in that respect, but I am looking for an incentive. We may not be able to target the directing mind, but we will be able to develop principles from the legislation that will encourage what I want to seethe development of a safety culture. I agree that the highest standards of proof should be applied, but when a company decides to slash its maintenance budget and the decision is taken without any regard to the consequences, that, to me, is a significant sign of the culture within that company.
Ian Stewart: Does my hon. Friend agree that Labour Members have been attempting to establish that there is a corporate aspectit is now established in the Billand that a full spectrum of penalties should be available to the courts, so that they can decide the impact or the implication of any action of a significant manager in such circumstances? I have no legal background, but does he agree that we need to enshrine all that in a single piece of legislation, so that it can be more easily presented at court than if those involved had to consider a number of pieces of legislation? If so, does he not also agree that, if we cannot to do that in the BillI hope that we canwe must do so in another piece of legislation?
Mr. Doran: I think that I agree with my hon. Friend, but I am not sure. However, I think that the point that he is making is absolutely right, and it is a fairly simple one: we either introduce legislation to enforce a safety culture that meets all our aspirations, or we leave loopholes and gaps. I do not suggest that there are loopholes and gaps in the Bill, but there is a glaring omission in respect of the individual responsibility of directors. Given every Labour Members contribution that I have heard at every stage of the Bills progress, I believe that that is certainly something that we want to address.
Peter Bottomley (Worthing, West) (Con):
At half-past 4, I was speaking for the Childrens Society, and I apologise for not being here when new clause 1 was
moved. When I was chairman of the Church of England Childrens Society in 1983, one of the children in our care died avoidably. We did not know at the time that it was avoidable, but we do now. I suspect that that is not the kind of issue covered by the Bill, which relates far more to the Piper Alpha example, where the exact train of circumstances cannot be found.
My knowledge of such things comes, first, from working in industrial relations and personnel at the British Steel Corporation in the late 1960s. In 1984, I became the Minister at the Department of Employment responsible for the Health and Safety Commission, and I therefore indirectly had an interest in the Health and Safety Executive. My last commercial job before first coming to the House of Commons was running a small electrical contracting business that put neon lights outside cinemas and theatres in the west end. That involved high voltage electricity, heights, working in curious circumstances and trying to ensure that people were both trained and knew when they could say no.
The point about trying to fill whatever gap there is in relation to corporate manslaughter and corporate homicide is that people ought to know when things are going wrong, and if they do not know and someone else notices what is wrong, the people in charge ought to pay a great deal of attention when they are told. To my mind, that gap is worth filling.
I, too, have been out with health and safety inspectors. I reflect now on the welcome that they got in garment-making workshops in the midlands and the east end of London. About 90 per cent. of the time, those inspectors give advice. Sometimes people do not have a choice about whether to take that adviceit must be takenbut giving advice is normally better than prosecuting, especially with smaller firms. If someone went into a garment shop where the boiler had not been checked for three years and where there was a chain on the fire exit and people would be trapped if there was a fire near the entrance in the way that people have been trapped in night clubs, for example, when emergency exits have been blocked, there clearly would not just be a health and safety prosecution but a more major direct prosecution.
Sometimes, we can look back and not quite understand what happened. Let us take, for example, the Kings Cross disaster. I was present when people were still being brought out alive and dead. The accumulation of litter was the problem. It was similar to the Bradford stadium fire. Afterwards, that was dealt with by spending £400 million on removing every wooden escalator tread in London. That saved no lives at all. An enormous amount of money was spent for no real purpose.
We must ensure that we get people to take practical measures, and I rely on the greatest strength of the British approach to health and safetythe tripartite approach. When I was a Minister, I had to go to Europe to resist parts of the social charter and all the rest of it, which those involved were trying to manipulate the rules to introduce. The reason why I resisted it was that we already had a tripartite structure that workednot perfectly, but to the extent that our levels of death and serious injury, although too high, were the lowest on most comparative league tables. We involved the unions and their members and those who
were not members; we involved the companies; and, in effect, we involved outside experts.
I have been listening to most of the debate and my mind has been changing on a number of the issues. If it were a longer debate or if I had had the chance to serve on the Committee, we could have considered some of the issues raised by Liberty about the gap in respect of unincorporated organisations and partnerships. However, those are the sort of things on which I do not have a clear view.
I will not repeat the issues that I raised when considering the Charities Bill, but I hope that the provisions passed in relation to this group of amendmentsthis is the kernel of the thing; the rest is detailwill not make people fear prosecution. They ought to understand that it might follow, and as has been illustrated by many of the contributions made today, they ought to try to build on what works and implement it. If they have not noticed a problem themselves, they should take it seriously when someone tells them about it.
Ian Stewart: Does the hon. Gentleman agree that, if the thrust of all our contributions is about deterrence and if the debate revolves around the great big corporationsthe Piper Alpha issues and so onwe can miss the relevance of the avoidable loss of an individual life? Does he also agree that, when there is no deterrence of any note, corporations will take decisions to try to save money and time that could render a situation dangerous perhaps for a large group of people or an individualfor example, the instruction to leave a guard off a machine?
I do not want to extend the issuemany different debates need to take place this eveningbut I shall give an example that worries me. One of my brothers-in-law used to run trains to Edinburgh. We used to argue that people fell from moving trains because they were drunk. So we said, Take the handles off the inside of the trains. They then used to open the windows and open the doors with the handles on the outside. We then introduced regulations to ensure that bolts were fitted so that train doors could not be opened when trains were moving. I do not know at what point not taking such action becomes gross negligence, but we have a constantly changing problem. I do not believe strongly in deterrence; I believe in it occasionally. I believe most strongly in trying to get people to set standards. If they will not set the standards themselves, they should accept the standards that are laid down by others and be encouraged to adopt them.
Mr. Sutcliffe: I am grateful to hon. Members on both sides of the House for their contributions. I said on Second Reading and in Committee that the motivation of all right hon. and hon. Members is to try to find a workable solution on an issue about which we all care passionately. We all know of examples from our own constituencies, and a number of examples have been mentioned in the debate.
I understand the scepticism that may exist. I do not accuse him of that, but my right hon. Friend the Member for Southampton, Itchen (Mr. Denham), who is the Chairman of the Home Affairs Committee, talked about discussing the issue more than 12 months ago. In fact, such issues have been around for over nine years, and we have been trying to address them. As the hon. Member for Worthing, West (Peter Bottomley) said, it is important that we get this right and change the culture in a practical way.
As we consider the various new clauses that are relevant to the debate, we need to consider the attitude of some of the organisations and bodies that are responsible for implementing the legislationthe Health and Safety Commission and the inspectors, the police and the Crown Prosecution Service.
In meetings that I have hadnot only today, but in the pastwith the relatives of victims, and most notably Families Against Corporate Killers, I have been struck by what they say about how they were treated as individuals and individual families. They felt deprived of justice and that they were not supported as individuals. Listening to those families, it struck me as a Home Office Minister responsible for considering road traffic accidents and related issues that families who are victims of road traffic accidents feel that they are dealt with differently from the victims of a criminal violent act. We all saw the outcome of the trial for the murder of the lawyer outside his home, and how people were horrified about that and how the system dealt with that. I want the same to apply to corporate killing, where it can be avoided. I also want to make sure that victims and their families are treated responsibly.
I fully understand the emotion that is involved, but it is important that we do not let emotion run away with us and that we make sure that what we try to achieve will be workable and meets requirements. People have come at the issue as lawyers, individual Members of the House and trade unionists. Some of the language that has been used is not appropriate or helpful. What is important is that we give the issue of individual liability a real airing, and we have done that this afternoon, as we did in Committee.
The driving force behind the Bill is the fact that the current law of corporate manslaughter is based on too narrow a definition of corporate liability. The law works reasonably well for small organisations, but it does not reflect the reality of decision making in large or complex organisations, where failures in the management chain can rarely be laid at the door of a senior individual manager. It is important to understand that point, because it underpins the Governments approach. I want to give an outline of the failings that led up to the sinking of the Herald of Free Enterprise, an issue that my hon. Friend the Member for Manchester, Central (Tony Lloyd) raised.
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