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6 Dec 2006 : Column 137WH—continued

In passing, I should note that Bond Pearce is not exceptional; it is similar to most large firms in its charging practices. There is nothing surprising in the way in which it makes money, which is all the more reason for the HSE to have done more to avoid resorting to external law firms. According to its own calculations, the HSE is now thousands of pounds out of pocket, and so ultimately is the taxpayer. My constituent is certainly £15,000 worse off and suffering still from an unforgivable amount of stress, not least because once a public body resorts to expensive leading lawyers against a small business, the playing field
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becomes uneven. No small business such as Roves farm can afford the resources that a large corporation or, indeed, a wealthy individual can muster against the taxpayer-funded might of a body such as the HSE.

All that public money has been wasted and such a burden has been placed on a small business because the HSE chose to confront Mr. Burr. Throughout the affair, there seems to have been a cultural disposition on its part to avoid negotiation, to insist on Mr. Burr doing what he was told and then to threaten him with the consequences if he did not. The assessment of risk is clearly a crucial task, but it is also subjective and there ought always to be room for reasoned discussion. Instead, questioning of its judgment seems to have been regarded by the HSE from a very early stage not as a basis for discussion, but as an affront. That is symbolised by the fact that when I held a meeting at Mr. Burr’s farm to try to bring the sides together, the time spent by the HSE representatives at the meeting was added to the costs that it sought to recover from Mr. Burr. Only when I made the strongest representations that, in my view, such charging was an extraordinary interference with the democratic process—a constituent being charged when public officials met his Member of Parliament to try to resolve a dispute—did the HSE reconsider. However, the fact that the HSE could even think of doing such a thing suggests a culture in which any questioning of its decisions is regarded as unacceptable and to be resisted.

A small exchange at the end of the meeting exemplified the HSE’s adversarial approach. The aim of the meeting was specifically to address concerns about the maze. Some progress was made and I summed up with a list of further actions in the hope that a resolution would then be reached. However, instead of leaving at that point, one of the HSE team turned to Mr. Burr and said aggressively to him—I witnessed this—that they would be coming back to require changes to his preparations for a Christmas event. Those were minor issues and could easily have been left for another time. We could have parted following that meeting with a sense of some accommodation and the hope of resolution. Instead, with the HSE representative raising those issues in that way at that time, Mr. Burr felt that the HSE was retaliating for having been questioned by his MP and that it was vindictively undermining an event in which he and his family were investing large amounts of time to provide a treat for local children at Christmas. Further good will was sacrificed for no advantage to the public policy goals of the HSE. Whatever the technical issues involved, a less adversarial approach would have been more productive in resolving them more quickly and easily and therefore more efficiently, with less cost to the public purse and far less stress to my constituent.

My dealings with the deputy chief executive of the HSE and its response to the Hampton report on regulation suggest that the HSE is aware of the need to adapt and is already making welcome progress in its approach to some of the biggest and most complex issues that it encounters. However, Mr. Burr’s experience suggests that, at a more microcosmic level, the culture still requires change. Running a small business can be profoundly stressful and demanding,
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and most small businesses do not possess the resources to cope with statutory agencies whose approach all too often is geared to dealing with large public corporations.

I should be grateful if my hon. Friend the Minister confirmed that she will ask the HSE to pay more attention at all levels of the organisation to the particular problems of small companies, such as Roves farm, and to demonstrate more sensitivity to them. I should also be grateful if she let me know what changes the HSE is making to implement the recommendation of the Hampton report that

I should also be grateful if she let me know what further changes the HSE is making to implement the recommendation of the Hampton report that businesses should be supported by regulators to comply with regulations—in other words, avoiding the adversarial approach that has characterised the HSE’s dealings with Mr. Burr. Finally, I should be grateful if the Minister wrote to me outlining what action she has taken to pursue those objectives.

4.15 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): I congratulate my hon. Friend the Member for North Swindon (Mr. Wills) on securing the debate. In the customary way, he has raised an important issue. I certainly thank him for the opportunity to consider the HSE’s dealings with his constituent, Mr. Burr, in improving safety for the public and, in particular, children at Roves Farm visitor centre. I shall draw some general conclusions from that case and deal with each in turn. None the less, I regret that the issues have had to be raised in this Adjournment debate, as I believe that in the past months other routes could have been taken to reach a solution in this case.

My hon. Friend spent time highlighting the background to the Burr case. Perhaps I can add some information. As he said, Mr. Burr and his wife operate a visitor centre at the farm site. Many children attend the visitor centre every year, so it is important that health and safety is properly managed at the farm. The HSE aims to ensure that children can have maximum fun and learning at the farm in sensibly managed conditions. The HSE regulates many farms and visitor centres and uses a range of tools—such as verbal advice, a written report done on site or a letter sent after the visit—to ensure that an appropriate standard of health and safety is adhered to. When necessary, inspectors use their powers to require specific improvements or to stop activities until they are made safe through an improvement or prohibition notice. Appeals against such notices are rare.

Since Roves farm set up a visitor centre, the HSE, as my hon. Friend’s remarks suggested, has had to serve an unusually high number of notices to get work carried out to secure the health and safety of visitors and employees. I can assure my hon. Friend that that is not a typical regulatory response by the HSE when regulating a farm. I regret to add that the HSE’s
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experience since 2003 has been that inspectors have not always met with a positive response from Mr. Burr. They have given advice, usually written as well as verbal, but sadly their experience is that Mr. Burr does not deal well with issues when given informal advice and they have previously needed to serve three notices to make progress and get deficiencies remedied.

I think that my hon. Friend suggested that in some way the HSE rushed to a conclusion and rushed to a prohibition notice on the maze. I shall take hon. Members through the time scale. In December 2004, two inspectors became seriously concerned about the risk to visitors, especially children, to Roves Farm visitor centre using the straw bale maze. They spoke to Mr. Burr, suggesting that he should, as the law requires him to do, carry out a formal risk assessment, so that they could have a discussion about whether there was proper management of risks well before the summer season of 2005. They asked Mr. Burr to contact them to confirm when the work had been done.

By early summer 2005, Mr. Burr had not responded, and as far as the HSE was concerned he had not taken any action. Inspectors then sought the advice of experts from within the HSE and from the fire brigade. Those experts visited the farm in July 2005 and confirmed that, in their opinion, there were serious deficiencies in fire prevention, fire escape, fire alarm and fire fighting measures in connection with the maze—in essence, they said that there was a significant risk of a fire starting in the straw bale maze. The design of the maze, as my hon. Friend has said, was an interesting one. However, the design made it foreseeable that, in the event of a fire, a child could be trapped in a smoke-filled tunnel, unable to find an exit.

I want to put on record the issues that the prohibition notice was meant to address. The bale maze was constructed of compressed large straw-bales, which had been assembled to provide a three-dimensional complex of narrow tunnels. The tunnels were unlit, and extended over an area of more than19 m by 10 m. They were 3.75 m deep, and the floors were covered in a fine layer of crushed straw that varied in depth but was at least 2 cm deep. Some of the tunnels were 19 m long. At any one time there could be more than 25 children, from pre-school age upwards, using the maze. The notice indicated that there was poor control over sources of ignition within the maze area. Dry straw on the floors of the tunnels was likely to transmit fire and smoke rapidly. There were poor arrangements for detecting a fire and there was no means of raising an alarm inside the maze. Escape from the maze was only possible from one side via the pre-existing tunnels, and no provision was made for fire escape or recovery of casualties. The means of raising the alarm was by blowing a whistle, but at the time of the HSE's inspection the whistle was missing. The alarm was tested under silent conditions and was heard faintly from within the stack only after 18 soundings, which in the HSE's opinion was unsatisfactory. The evacuation system was inadequate. A test evacuation had been made and it took approximately 10 minutes.

As I said, it was foreseeable that in the event of a fire, a child could be trapped in a smoke-filled tunnel unable to find an exit and would not be likely to be rescued before he or she succumbed to fumes or flames. In fact, the experts—not only the HSE inspectors but the fire
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brigade as well—advised that there was a serious risk of multiple fatalities should a fire occur. I also want to put on record that the prohibition notice was affirmed by the tribunal without modification.

Mr. Wills: Before the Minister moves on from that point, does she accept that the HSE and Mr. Burr have now reached agreement on the measures that should be put in place to protect the public? Mr. Burr has always had the interests of the public at the front of his mind and agreement has now been reached on how those interests are best served. Given that, surely the issue is not the agreement, but why it could not have been reached earlier.

Mrs. McGuire: I have put on record the prohibition notice because my hon. Friend sought to draw some general conclusions from the way in which the matter relating to the farm was dealt with, and I do not think that those general conclusions are appropriate in this case. There was a serious health and safety issue. I hope also that by indicating the time scale in which Mr. Burr was given the opportunity to address some of the issues relating to the risk assessment, I might persuade my hon. Friend to agree that the HSE did not act precipitately, but gave ample opportunity to a small business person to make suitable arrangements to deal with the serious matters that were identified by both the fire service and the HSE.

My hon. Friend’s help was very much appreciated by the HSE. He acted as a mediator, because Mr. Burr at one point refused to have direct contact with HSE inspectors. I trust that my hon. Friend will agree that the seven-month period for carrying out the risk assessment does not suggest a heavy-handed approach by the HSE, and that the HSE did not unnecessarily push a small business person into making expensive modifications to the maze.

As my hon. Friend said, there was a prolonged exchange of letters and e-mails. The reason why the HSE had to continue to deal with its legal advisers was that Mr. and Mrs. Burr, although they accepted the modifications, did not withdraw their appeal until the tribunal hearing. By that stage the witnesses and HSE's legal advisers had already incurred significant preparation costs. My hon. Friend has highlighted the various costs and he will be aware that it is for the
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county court to consider the details of costs and their justification. If Mr. Burr considers them unreasonable, he can pursue that option.

My hon. Friend has made a number of criticisms of the HSE’s handling of the case. I recognise his irritation, annoyance and probable anger at the fact that the HSE was going to charge for the time that one of its inspectors had spent with him. That was a misunderstanding and, as my hon. Friend has indicated, those costs have been removed from the costs of the HSE’s action. I hope that he will accept the HSE’s apology.

The case could have been resolved easily and far more quickly than it was, but it takes two to tango, as they say. I do not judge Mr. Burr on his reasons for not liking the HSE, but it offered assistance and support to him and he failed for some reason to respond positively. I hope that my hon. Friend accepts that the HSE had a duty to ensure that the modifications were made to a structure that posed a serious fire risk for young children and, until they were made, to put a prohibition notice in place. As I said, the tribunal affirmed that prohibition notice without modification.

I should like gently to correct my hon. Friend’s comment about what the tribunal told Mr. Burr and the HSE. They were not told to go and sort out the fundamental issue of making the maze safe; they were advised to sort out the costs. I welcome, however, the positive comments that he made about the HSE’s deputy chief executive.

The Hampton report is about better regulation of small businesses and the burdens that health and safety issues appear to place on them. That report has been praised by the Better Regulation Commission because of the efforts that are being made to ensure that the burdens are balanced and proportionate. I hope that my hon. Friend recognises that the HSE did not take action because it wanted to impose additional burdens on Mr. Burr and the visitor centre, but that it had to take action based on the expert advice of its own people and of the fire service. A fire risk and a danger to children from my hon. Friend’s constituency and beyond had been identified. I regret the need for the debate, but I know that the HSE wants to reach a solution and a conclusion and I hope that the debate results in discussions continuing in a way that ensures Mr. Burr does not feel imposed upon.

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Employment Contracts (Security)

4.30 pm

Lorely Burt (Solihull) (LD): I welcome you to the Chair, Mr. Hancock, for this short but important debate. I am grateful to be allowed to raise this important subject in the Chamber today and I am indebted to the Professional Contractors Group for bringing the matter to my attention and for its helpful briefings.

I want to start with an apology to the Minister for the confusion over the title of this debate. This is the first time that I have been successful in securing a Westminster Hall debate and I am still struggling to understand how my original title, “Contractual security and protection for people who work via a contract for services (freelancers, contractors, consultants)”, became transformed into “Security of short term employment contracts”. However it happened and whoever’s good intention it was to shorten and simplify the title, the error illustrates one of the key points that I want to make today.

The people for whom I am speaking today are literally the “little guys” of business. I emphasise that they are not employees; they are self-employed contractors. They are the people whom companies call in when they need expertise for a specific, short-term reason, and they become confused with employees by courts and legislators who misguidedly try to protect or hamper their activities. Today, I hope to achieve four objectives: first, recognition by the Minister that common law developments have created commercial uncertainty, and that that is economically damaging; secondly, an acknowledgment by the Minister that Government action is desirable to clarify common law uncertainty; thirdly, a comment from the Minister on the recent Green Paper and an indication of the Government's position; and finally, a commitment from the Government to maintain the UK's traditional freedoms and certainties, and not to allow employment rights to intrude into commercial relationships.

I shall begin by explaining why it is so important that the division between professional contractors and employees is properly clarified and enshrined in law. There are basically two types of contractual relationship: employment contracts and commercial contracts. The distinction is often expressed in terms of contracts “of service”, which cover employment, and contracts “for services”, which are commercial. In other words, “contractors” in this context operate via commercial contracts or contracts for services. If people enter into such a commercial relationship as a professional and career choice, it is enormously beneficial to the UK economy. Contracting works to the advantage of the company and the contractor. The company receives specialist expertise for as long as it needs it. If the contractor does not deliver the goods, they can be dispensed with without the worry of employment protection legislation.

The contractor, by taking on the economic risk—that is, by absolving the employer from employer risk and providing only what is needed when it is needed—can charge a premium for their services. They generally have more flexibility about when and where they work; they are contracted to complete a job and
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are generally left to get on with it. The relationship is also good for the organisation’s employees. It is much easier to extend employee rights when not all the work force will be utilising them. As soon as a professional contractor starts being treated as an employee, the benefits to all cease.

My first request is for a recognition from the Minister that common law developments have created commercial uncertainty, and that that may be commercially damaging. I want to bring two cases to his attention: Dacas v. Brook Street and Cable and Wireless v. Muscat.

In Dacas v. Brook Street, a Mrs. Dacas attempted to claim unfair dismissal by the agency that she worked for at the time. She failed, but the Court of Appeal judges said that she had almost certainly been employed not by Brook Street, the agency, but by the end client, Wandsworth borough council. In Cable and Wireless v. Muscat, a Mr. Muscat was found to be an employee of Cable and Wireless, despite the fact that he was providing services via a limited company. The judges decided that it was “necessary” to find an employment relationship to make sense of what was happening!

The logic behind those decisions was presumably that they were cases of “disguised employment”—that the person involved was working in the manner of an employee, although formally working via a commercial contract. Employment rights were therefore pinned on the end client. That logic is fair enough as far as it goes, but it is totally unclear how it applies to other working relationships. Mrs. Dacas was not an employee when she started working for Wandsworth borough council, so when and how did she become one, and when would that apply to other agency workers?

Mr. Muscat had previously been an employee of Cable and Wireless, but what exactly made it “necessary” to find an employment relationship? In what circumstances would other workers be found to be employees in a similar way? Your guess, Mr. Hancock, is as good as mine.

What is clear is that those cases have created great commercial uncertainty. Companies are hesitating to take on contractors, and many terminate their contracts after 48 weeks, despite the fact that the work is not completed. The damaging aspect for all parties does not need spelling out, and there are damaging knock-on effects for the economy.

My second request is for an acknowledgment that Government action is necessary to clarify common law uncertainty. The Government's strategy paper on success at work, which was published earlier this year, contained many sensible observations about the UK's labour market, and many in business were pleased that there were no recommendations to change the fundamentals of employment status and relations. However, the Government have perhaps been unlucky in their timing. The consultation exercise started in 2002, and the Muscat and Dacas cases have arisen since then.

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