Deregulation Bill
Public Bill Committee, 25 February 2014.
Jimmy Hood (Labour, Lanark and Hamilton East)
Before we begin, I have a few preliminary announcements. Please could you switch your electronic devices off or on to silent? Tea and coffee are not allowed during sittings of the Committee. The notice period of amendments is three working days. Starred amendments—those that have been tabled with inadequate notice—will not normally be called.
To turn to today’s proceedings, the Committee will first be asked to consider the programme motion on the amendment paper. Debate on that is limited to half an hour. We will then consider a motion to report written evidence and then a motion to permit the Committee to deliberate in private in advance of the oral evidence sessions. I hope that we can take those motions formally. Assuming that those motions are agreed to, the Committee will then move into private session. Once the Committee has deliberated, witnesses and members of the public will be invited into the room and the first oral evidence session will begin.
Jimmy Hood (Labour, Lanark and Hamilton East)
Copies of written evidence that the Committee receives will be available in the Committee Room.
Jimmy Hood (Labour, Lanark and Hamilton East)
We will now briefly go into private session to discuss lines of questioning.
Examination of Witness
Jimmy Hood (Labour, Lanark and Hamilton East)
I said at the beginning of the sitting that no hot beverages are allowed in the Committee. I want to make that point again. We will now hear oral evidence from the Institution of Occupational Safety and Health. Before I call the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timing of the programme motion that the Committee has agreed, which states that the Committee will question the first witness until 9.30 am. Will the witness please introduce himself for the record?
Jimmy Hood (Labour, Lanark and Hamilton East)
Thank you, and welcome. I call Chi Onwurah.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Thank you, Mr Jones, for presenting evidence to us this morning. In your submission to the Joint Committee, you were clearly against the removal of health and safety legislation from the self-employed as set out in clause 1. It is telling that there are no witnesses in support of the clause today, so I will have to ask you to set out the case for the changes, such as it might be. Although the most recent survey from the Federation of Small Businesses showed that six out of 10 businesses cited the economy as the most important barrier to growth, and the businesses I speak to generally cite access to finance, there is a strong perception that health and safety regulation is a significant burden.
Oliver Heald (Conservative, North East Hertfordshire)
On a point of order, Mr Hood. Is it in order to predict what future evidence will be when the written submissions suggest that the British Chambers of Commerce and other business interests support the change?
Jimmy Hood (Labour, Lanark and Hamilton East)
That is not a question for me. The question is the responsibility of the Member asking it. As long as she is in order, that is okay.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Thank you, Mr Hood. What work has the institution done to understand the evidence base for the concerns over health and safety regulation when it comes to small businesses and the self-employed?
John Hemming (Liberal Democrat, Birmingham, Yardley)
Referring back to the Joint Committee on the draft Deregulation Bill, if I remember rightly the impact assessment said that initially there would be additional costs for businesses and a saving only after time. Do you still see that to be the situation?
John Hemming (Liberal Democrat, Birmingham, Yardley)
So it will still cost money?
John Hemming (Liberal Democrat, Birmingham, Yardley)
Given that the proposal will cost money to businesses now, would it be better to defer it until the economy is in a stronger position?
Andrew Bridgen (Conservative, North West Leicestershire)
It is nice to see you again, Richard. We talked about the difference between perception and reality, but in politics and many other things perception is reality. You talked about your target group—the self-employed people who do not employ anybody—and said that they will not see any benefit. However, I put it to you that the target group is not the people who are currently self-employed but the people who might become self-employed in the future. The perception that they are not going to be burdened by health and safety regulations might encourage them to become self-employed and further improve our economic performance.
When our major European competitors, such as Germany, Italy and France do not include the self-employed within the scope of health and safety regulation, how can we compete? They do not have horrendous health and safety records and are seen as safe countries. What are they doing differently from us?
Andrew Bridgen (Conservative, North West Leicestershire)
What about France and Italy?
Andrew Bridgen (Conservative, North West Leicestershire)
I understand that the Health and Safety Executive supports the clause?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
I would like to explore the potential negative impacts of moving the self-employed out of health and safety regulations, in particular the elements of confusion to which you referred. We have had a massive growth in self-employment. Since 2008, three quarters of people leaving unemployment have gone into self-employment—three times the number going into traditional jobs—84% of whom are aged 50 and above. What likelihood do you see of these changes causing confusion? The hon. Member for North West Leicestershire suggested that health and safety regulations prevent people from becoming self-employed, yet we have had a massive increase in self-employment. What is the likelihood that they will cause confusion?
Have you had time to study the draft list of those who will be exempt? The Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), mentioned beekeeping and mountaineering in his speech on Second Reading. Is it easy to identify whether those occupations will be exempt or subject to health and safety legislation from looking at the list?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Might there be implications for civil litigation if someone was exempt from health and safety, and they not only posed a risk but caused harm or injury to a customer?
Oliver Heald (Conservative, North East Hertfordshire)
It is good to see you again. The nature of your institution is that you are practitioners who advise business and others about health and safety. Is that right?
Oliver Heald (Conservative, North East Hertfordshire)
And of course you are not in favour of any reduction in the businesses, enterprises or others who are covered by your members.
Oliver Heald (Conservative, North East Hertfordshire)
Good. Now, Professor Löfstedt said that there was a case for doing what other countries do and
“exempting from health and safety law those self-employed people…whose workplace activities pose no potential risk of harm to others.”
He said that 1 million people could be relieved of those obligations. You disagree with that. Why?
Oliver Heald (Conservative, North East Hertfordshire)
Say I am a businessman just starting up and I have to go through risk assessments and so on, when my business is that I am a professional writer who poses no hazards to other people. Why should I go through that?
Thomas Docherty (Labour, Dunfermline and West Fife)
On a point of order, Mr Hood.
Jimmy Hood (Labour, Lanark and Hamilton East)
Order. We are not having points of order just to make comments. If it is a point of order, I will take it. If it is not, I will be less co-operative with future requests.
Thomas Docherty (Labour, Dunfermline and West Fife)
Can you remind us what the procedure is for asking questions when the witness is trying to give an answer? Should the witness be given time fully to answer a question before Members ask supplementaries?
Jimmy Hood (Labour, Lanark and Hamilton East)
That is not a point of order. I have made it clear that questions from Members should be brief. Since the witness is wanting to make representations to the Committee, I will give them a wee bit more leeway than I will Members. Short and sharp questions, please.
Oliver Heald (Conservative, North East Hertfordshire)
So really, your point is one about perception as well. You are saying that the perception should be that everybody is covered by health and safety.
Oliver Heald (Conservative, North East Hertfordshire)
So nobody should be exempt?
Jimmy Hood (Labour, Lanark and Hamilton East)
Order. I am afraid that the next question will probably have to be the last as we have three minutes to go.
James Duddridge (Conservative, Rochford and Southend East)
How much does a risk assessment cost on average?
James Duddridge (Conservative, Rochford and Southend East)
And the cost for that—a rough ballpark figure? Would it be £100,000 or £10,000? I am particularly interested in the lower-risk businesses.
James Duddridge (Conservative, Rochford and Southend East)
No, I asked how much it would cost for a business. I think you are purposely taking an extreme at one end and an extreme at the other. Will you answer my question? You are a professional in the industry and I am asking what a small business would pay on average. I do not think that that is an unreasonable question. You have given me an extreme example of the chemical industry and the example of someone who is self-employed.
James Duddridge (Conservative, Rochford and Southend East)
I said on average. What about two people in a business, then?
James Duddridge (Conservative, Rochford and Southend East)
As a professional in the industry, you cannot give me an average?
James Duddridge (Conservative, Rochford and Southend East)
Okay. I think we just have to note that the professional in the industry cannot give the information.
Jimmy Hood (Labour, Lanark and Hamilton East)
Order. The hon. Gentleman does not have to have a conversation with me about his interpretation of the answer.
James Duddridge (Conservative, Rochford and Southend East)
I was just saying that he is not giving us an answer.
Jimmy Hood (Labour, Lanark and Hamilton East)
We have one minute remaining.
John Cryer (Labour, Leyton and Wanstead)
My question is about unintended consequences. Might there be a temptation for businesses that see the change to think that rather than having employees they will make their work force self-employed in order to gain the exemption?
Jimmy Hood (Labour, Lanark and Hamilton East)
I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank the witnesses for their evidence.
Examination of Witnesses
Jimmy Hood (Labour, Lanark and Hamilton East)
We will now hear oral evidence from the Trades Union Congress and Unite. For this session, we have until 10 am. I invite the panel to introduce themselves.
Jimmy Hood (Labour, Lanark and Hamilton East)
I welcome the panel to the Committee.
Toby Perkins (Labour, Chesterfield)
May I start by drawing the Committee’s attention to the Register of Members’ Financial Interests, in respect of my membership of Unite and registered donations?
Most people who I have spoken to about clause 2 say that although the power for tribunals to make wider recommendations is not used that much, the clause sends a message to people who might be worried about taking on employees that the Government are doing what they can to reduce the worries about the tribunal system. They would recognise that it is not being used all that much, which I would see as a positive, but, none the less, it will say to businesses, “It is safe to employ people in this sort of environment.”
Can the panel give us their perspectives on how the power has actually been used and whether there is evidence of its being a positive factor or that major problems have been caused as a result of it?
Toby Perkins (Labour, Chesterfield)
You are right to say that some critics are using the fact that it is rarely used as a reason to get rid of it. Other people might say that the fact that it is clearly being responsibly used by tribunals and the fact that it is advisory means that we should be positive about the fact that it is there to support businesses that want to make improvements after they have fallen on the wrong side of a tribunal verdict. The very fact that it is occasional should be an asset, rather than a reason to get rid of it.
Jimmy Hood (Labour, Lanark and Hamilton East)
Do you want to come in, James Duddridge?
James Duddridge (Conservative, Rochford and Southend East)
No.
Toby Perkins (Labour, Chesterfield)
For once, I was being generous.
Jimmy Hood (Labour, Lanark and Hamilton East)
I will let James Duddridge come in later. Carry on, Mr Perkins.
Toby Perkins (Labour, Chesterfield)
One of the issues that concerns me on clause 1, which is about the health and safety regulations and the exemptions for the self-employed, is that it sends the message that health and safety is something that we can opt into or out of depending on how important it is. It also creates the impression that there is a huge burden that we need to alleviate businesses from. I worry that we are sending a message with the legislation that, when a business takes one of the most significant steps it can take by going from being one person to an employer, they will be opening themselves up to a huge level of risk. The legislation will be a barrier to growth; the self-employed will be deterred from taking someone on because they will see health and safety legislation as a major problem. Can you talk us through whether you have concerns on the legislation as a barrier to growth, what it says more broadly about the importance of health and safety and the extent to which it is a bad thing and something that we should try to prevent businesses having to comply with?
Jimmy Hood (Labour, Lanark and Hamilton East)
Order. I just make the point that long questions take away time for the witnesses to give answers to the Committee.
Toby Perkins (Labour, Chesterfield)
Sorry.
Jimmy Hood (Labour, Lanark and Hamilton East)
Who wants to take that question?
Gareth Johnson (Conservative, Dartford)
May I ask you a general question on principles? Does the panel accept that if we can exempt—I am thinking about clause 1 —small businesses and self-employed people from obligations under health and safety legislation without endangering anybody, that is a good thing? What is your opinion?
Gareth Johnson (Conservative, Dartford)
You say that you are in favour of removing the bureaucracy. Might I ask you to mention some? What current bureaucracy under the existing system would you like removed?
Gareth Johnson (Conservative, Dartford)
Finally, would you accept that if you have somebody who is trying to set up a small business and become self-employed—inevitably, whatever industry they are going into, there will be myriad things they will have to take into account—having health and safety obligations in addition to other obligations is just one extra burden that is placed on a small business setting up, and that doing away with it makes it that much easier for them to set up their small business and become self-employed?
Gareth Johnson (Conservative, Dartford)
In the law of tort you cannot endanger anybody else. That is a given.
Gareth Johnson (Conservative, Dartford)
I am talking about extra regulations in terms of health and safety that a self-employed person has to go through when they are setting up a business, in addition to ordinary tort law which will exist anyway. Do you not accept that that is just one extra hurdle that someone has to overcome in order to set up a business and become self-employed?
Thomas Docherty (Labour, Dunfermline and West Fife)
I draw colleagues’ attention to my entry in the Register of Members’ Financial Interests—I am a member of the Transport Salaried Staffs Association. Can I clarify, Mr Robertson: am I right in thinking that what you said a few moments ago was that there is a danger that you increase the bureaucracy on the self-employed by making them pay extra fees to go to outside consultancy and do more paperwork to make sure that they are not actually required to then do the current paperwork?
David Rutley (Conservative, Macclesfield)
Thanks for the points you have been making. One thing is sure when you speak to small businesses—certainly when I do: health and safety is seen as a barrier. As you say, health and safety is important and we want to save lives, but many small businesses and self-employed people see it as a barrier to entry. Given the large number of people who have joined the ranks of the self-employed—that is a good thing because they will create growth, support their families and contribute to the local economy—should we not be doing everything we can to reduce barriers, perceived or real, to enable more people to become self-employed?
David Rutley (Conservative, Macclesfield)
Thank you for your contribution. You must be speaking to different businesses from the ones I speak to in Macclesfield and round about because it is pretty clear from the responses from those I have spoken to, such as the Federation of Small Businesses and the chamber of commerce, that there is support for this move.
I and others here are talking about the need to remove barriers. When you look at what is going on in Germany, which was referred to earlier, there is a much higher contribution in terms of employment and to gross domestic product from small and micro businesses. We have a long way to go and it is vital to remove those barriers. Can you respond and contribute your thoughts on why Germany has gone down the route we are looking to move to when it has made such a strong contribution through small businesses to its economy?
David Rutley (Conservative, Macclesfield)
In Germany, the self-employed are exempt from this.
Toby Perkins (Labour, Chesterfield)
Sarah, a moment ago you described the proposal as a solution in search of a problem. I was previously self-employed; I ran an internet business. I was one of the people whom the Bill is designed to help. However, I cannot think of anything I would have done differently as a result of being relieved of the right to sue myself for having the wrong keyboard. I cannot think what it would have resulted in me doing differently. This is the second evidence session, and we have heard a lot of people talk about perception. Can you think of any concrete, positive thing that self-employed people currently have to do that the proposal will stop their having to do?
Toby Perkins (Labour, Chesterfield)
On clause 2, are you or any of the panel aware of any problems that have been caused by a tribunal’s wider recommendation and have had a negative impact on the employer?
Toby Perkins (Labour, Chesterfield)
And in fact, I believe that the Government’s impact assessment suggested that the changes to the tribunal system would be a cost to businesses, rather than a saving, because they would not save those costs in the future. Therefore, we have two deregulatory measures that are likely to lead to businesses spending more, not less.
Oliver Heald (Conservative, North East Hertfordshire)
Of course, both sides can spin, but the point I wanted to put to you is that Professor Löfstedt, whose report this came from, is the most highly respected risk manager, and a professor at King’s, London, and he concluded that there was a case for following a similar approach to other countries and relieving a million people who are self-employed from the burden of this regulation. It is a criminal enforcement regulation, in the sense that the duty is enforced by the criminal law and any self-employed person would have to take it seriously, wouldn’t they?
Oliver Heald (Conservative, North East Hertfordshire)
But you are disagreeing, aren’t you?
Oliver Heald (Conservative, North East Hertfordshire)
So are you saying that this should be a list of safe occupations?
Oliver Heald (Conservative, North East Hertfordshire)
But why have you been going on this morning as though this had no respectable academic basis to it, when the leading expert in the country has proposed it?
Oliver Heald (Conservative, North East Hertfordshire)
Well, clearly, if you want to exempt, you have to have an evidence base to work from and it is much easier to put forward an evidence base of what is unsafe than what is safe. So that is the logic behind this.
You have suggested that if this goes ahead, everybody will be rushing to the consultants for further advice, but the consultants are agreeing with you, saying, “Let’s keep a million customers in the pot.” What do you say to that? They are not saying what you are saying at all—that they will be losing business—but are keen to keep these self-employed.
Oliver Heald (Conservative, North East Hertfordshire)
These wider recommendations are not enforceable, are they?
Oliver Heald (Conservative, North East Hertfordshire)
The wider recommendations that can be made on an equality case.
Oliver Heald (Conservative, North East Hertfordshire)
Sorry, I am having to be a bit quick.
Oliver Heald (Conservative, North East Hertfordshire)
Say you had lost a case anyway, on the basis that your managers did not fully understand equalities, and you are then back in front of the tribunal a few months later; that is something the tribunal can take into account anyway, isn’t it?
Oliver Heald (Conservative, North East Hertfordshire)
This has not been used much. It is not enforceable, but the concern of business is, of course, that the wider recommendations could be very burdensome.
Jimmy Hood (Labour, Lanark and Hamilton East)
I am afraid that brings us to the end of the time allotted for the Committee to ask questions of these witnesses. I thank you on behalf of the Committee for your evidence.
Examination of Witness
Jimmy Hood (Labour, Lanark and Hamilton East)
We will now hear oral evidence from the British Chambers of Commerce. For this session, we have until 10.30 am. Will the witness please introduce himself for the record?
Jimmy Hood (Labour, Lanark and Hamilton East)
Welcome to the Committee.
Toby Perkins (Labour, Chesterfield)
Maybe you could start on clause 1 —I know you are willing to be questioned on three or four clauses—which is to do with health and safety and the self-employed. As someone who was previously self-employed and working in an office himself, what do you think will be the most significant benefits, if any, of the exemption?
Toby Perkins (Labour, Chesterfield)
We are all in the same boat.
Toby Perkins (Labour, Chesterfield)
Can you point to anything positive that someone in precisely that kind of circumstance would no longer have to do that they previously would have, or is it simply a question of perception?
Toby Perkins (Labour, Chesterfield)
Perception is important. In terms of what you have just said, someone in that circumstance would not have to carry out a risk assessment now under the law. I recognise—and this is perhaps where there is a job for all of us—that the more we talk about burdens the more we create a disincentive for people to set up a business. No one has yet been able to come up with something specific that businesses would not have to do any more, so it then all ends up being about perception.
As someone who has set up my own business, I know that no one goes into business because they want to do more bureaucracy. People want to get on with doing business and selling goods. When the Conservative party was in opposition, it talked about burdens—all of us in business do—but sometimes it is important to ask what it is we are talking about. If we went to your members and said, “After all the talk there has been about regulation we now have a Deregulation Bill, and this is what it means,” do you think there would be a sense of disappointment that the Bill is the answer to all the talk we have heard over the past 16 years?
Toby Perkins (Labour, Chesterfield)
You say it will not make a big difference in terms of perception, but will it make a big difference in terms of practical application?
Toby Perkins (Labour, Chesterfield)
Finally, in 2010 the World Bank said that Britain is the easiest place in Europe to set up a business, and one of the easiest in the world. My worry is that the message we send to business is that it is difficult, frightening and dangerous. Actually, we have seen loads of people setting up businesses, as we often do in a recession, but the Bill potentially puts in place a barrier for those people who at the moment are self-employed and thinking of taking that big step of taking on their first employee. We are saying to them that the moment they go from being self-employed to having an employee, it all becomes dangerous and difficult, and there are loads of things they are going to have to comply with—we build a monster in people’s minds that does not actually exist.
Do you share my concern that if we create that sense, when someone then thinks, “I am doing pretty well, so I want to take staff on,” they will also think there is something to be worried about if they do?
Andrew Bridgen (Conservative, North West Leicestershire)
We heard from IOSH earlier that there is already considerable confusion among the self-employed. IOSH said that some people were doing something, some people were not doing anything at all and people did not know what they had to do. Mike, would you agree that having defined activities that will be covered by health and safety for the self-employed is a clarification in itself?
Andrew Bridgen (Conservative, North West Leicestershire)
I have lot of sympathy about the cliff edge in taking on employees, but the vast majority of self-employed people never take on an employee. Is that not another opportunity for Government to give a lot of support to self-employed people who are thinking about taking on employees? That is where we should be targeting the next lot of business support going forward. Will you comment on the growth duty for non-financial regulators as well?
James Duddridge (Conservative, Rochford and Southend East)
To return to the health and safety issue, I wonder whether the Government are being far too timid and whether you would support a change that went further. If, as a sole trader in Southend, I set up a business selling rugby shirts in competition with Toby, I understand that it is just me, and under the new regulation I have no health and safety concerns. However, if I take on John as a partner and we both have a 50% equity share, two people are then involved in the business, and suddenly we have health and safety concerns. If both of us set up separately in competition with Toby, we would not have.
I am very conscious, having set up a couple of businesses myself, that sometimes they are set up in an unstructured way. It is not just one person; someone who might be a business partner in the longer term is just someone to discuss things with early on. Should the Government not be bolder and include partnerships or exemptions for that early stage, when people might be working for free and there is not an employment relationship?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
May I bring you back to the growth duty? Could you give Members some concrete examples that illustrate what sort of impact you think this could make to your members?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
To what extent have your members put pressure on you to try to get these changes through? Is the need for a growth duty at the forefront of their minds?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
May I ask you a question on something that has not come up yet—apprenticeships? Through the Bill, the Government seek to give greater powers to businesses to be involved in apprenticeships. Perhaps, in some respects, businesses do not want that, because that would be an extra activity to undertake. What is business’s view on whether they want to have a greater say over the way that apprenticeships are structured?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
Do they have an appetite to take on a greater degree of responsibility for the funding aspects?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
Is there a different model they would prefer in terms of channelling the funding?
Thomas Docherty (Labour, Dunfermline and West Fife)
Looking at the list of proposed regulators, have you had any feedback or ideas from your members about how the Drinking Water Inspectorate, which is supposed to keep our water clean, or the Office for Nuclear Regulation, which is supposed to stop nuclear power stations from blowing up, can encourage growth?
Thomas Docherty (Labour, Dunfermline and West Fife)
While I understand the principle across the board, can I put it to you that, having worked in the nuclear industry myself, the only companies that the ONR regulates are what is now EDF, what was British Nuclear Fuels and one other company? These are multi-billion-pound businesses, and it is in the public’s interest for the inspectorate to be able to turn up unannounced at a nuclear power station. Would you be surprised if your members could think of ways that the nuclear inspectorate could make life easier for the multi-billion-pound industries as a priority?
David Rutley (Conservative, Macclesfield)
One thing we have not touched on so far is clause 2. I just wanted to check what the BCC’s view is on the proposals to remove tribunals’ power to make wider recommendations.
Andrew Bridgen (Conservative, North West Leicestershire)
I want to make a point based on the previous evidence. Both Sarah Veale and I served in the Löfstedt review back in 2011, which is some time ago. It would appear that we have a different recollection of Professor Löfstedt’s recommendations. May I suggest to the Committee that we write to Professor Löfstedt for his view on clause 1 as it stands? That would be useful for clarification.
Jimmy Hood (Labour, Lanark and Hamilton East)
It is not for the Chair to accept suggestions from Members during an evidence session. The point of evidence sessions is to take evidence from witnesses. Any comments on the evidence can be discussed in Committee.
David Rutley (Conservative, Macclesfield)
Going back to the new growth duty, again you have spoken eloquently on the subject, but I want to check BCC’s perception of whether this will help to reduce compliance costs for your members and how BCC will want to work with the Government to ensure that non-economic regulators follow through and deliver on the approach as we envisage it?
Jimmy Hood (Labour, Lanark and Hamilton East)
I am afraid that this will probably have to be the last question as it is now 10.27 am.
Chris Williamson (Labour, Derby North)
I noted your response to the question about moving the power of tribunals to make wider recommendations. Will you comment on whether you think that will lead to your members amending their practices when they lose a tribunal, or is it likely to improve the situation in terms of them amending their practices? Will it have an effect either way?
Chris Williamson (Labour, Derby North)
But if a tribunal made a wider recommendation, do you agree that not only might that have an impact on the employer involved, it might have a wider impact on other employers who might take cognisance of it? In the absence of that, could bad practices then continue?
Chris Williamson (Labour, Derby North)
It might mean, though, that some employers do not realise that they are engaged in an unacceptable practice that they might otherwise have been able to tackle had they had the benefit of the wider recommendations being made.
Jimmy Hood (Labour, Lanark and Hamilton East)
I am afraid that brings us to the end of the time allotted for questions. I thank the witness on behalf of the Committee.
Jimmy Hood (Labour, Lanark and Hamilton East)
Mr Hamer, I invite you to tell the Committee who you are.
Jimmy Hood (Labour, Lanark and Hamilton East)
Welcome, Mr Hamer. Mr Perkins.
Toby Perkins (Labour, Chesterfield)
It would help if you could start by taking us through your corporate view on the provisions of clauses 3 and 4. Do you welcome them? Can you identify any particular advantages or disadvantages?
Toby Perkins (Labour, Chesterfield)
You wrote to say that the apprenticeship brand is incredibly important.
Toby Perkins (Labour, Chesterfield)
My perception is that the BAE apprenticeship would be seen as a brand in itself that people would respect. The Labour party is keen on ensuring that that broader apprenticeship brand is strengthened and protected. How important is it for you as an employer—not just of someone who has taken on an apprenticeship, but perhaps of people in the later stages of their careers who have served an apprenticeship with other organisations—that that apprenticeship brand is preserved? You want to know, if you take on someone who has been through an apprenticeship, that they have a real base from which they have started their career.
Toby Perkins (Labour, Chesterfield)
There are a number of small and medium-sized businesses that I have spoken to that have said that they would like to take on apprenticeships, but they are worried about the bureaucracy and whether what they get when the apprentices are sent to the further education system is relevant to the learning that they need. We want to look at how we can open up apprenticeships to more businesses and how we can encourage more businesses to have them. At the same time, we are strongly of the view that the apprenticeship brand needs to be strengthened. It needs to be absolutely paramount that people know that someone who has done an apprenticeship has a real body of work behind them.
A criticism of this Government has been that they have pushed the numbers of apprenticeships without being careful about quality. In terms of the changes proposed here, what caveats would you offer to the Government to ensure that we do what you and I both think is important, which is protecting the strength of the apprenticeship brand? How do we ensure that the opening up and simplification of the definitions does not weaken or fail to strengthen what an apprenticeship should be about, which is that sound base?
Jimmy Hood (Labour, Lanark and Hamilton East)
Mr Hamer, I do not know whether it is the acoustics, but I can only just hear you. Perhaps you could speak a little more loudly and a little more directly into the microphone.
Caroline Nokes (Conservative, Romsey and Southampton North)
The 2012 independent review on apprenticeships by Doug Richard put a big emphasis on the need for Government to improve the quality of apprenticeships and to make them particularly focused on the needs of employers. Do you think that there is any danger that the specific needs of the apprenticeships themselves might be lost in that?
Caroline Nokes (Conservative, Romsey and Southampton North)
I now have a question on a completely different aspect, drawing on an example that I wish I could say was still in my constituency, but sadly is not. The Ford Motor Co. offers very good apprenticeship schemes all over the country, but I was particularly thinking that they could be found in both Dagenham and Wales. Do you think that the differential between the Welsh system and the English system will cause any problems for companies such as Ford, which operate in both England and Wales?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
May I bring you back to the issue of quality, proliferation and perhaps transferability? We heard from an earlier witness that he thought that employers perhaps wanted an apprenticeship for mechanics that was about dealing with cars, then there might be a separate one for dealing with buses or lorries, for instance. How do you stop that proliferation, or is it something that you would welcome? How do you ensure that there is transferability? In other words, employers can see that someone has done an apprenticeship in x, y and z, and understand what it is that has been done and whether it is relevant to their business, which might be slightly different in nature.
Tom Brake (Liberal Democrat, Carshalton and Wallington)
In your experience, how easy has it been to get the different employers to coalesce around the four core programmes? Do you have a reconciliation process, when people have differing views, to get agreement around the core programme?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
May I ask one final question on how the employers should receive the funding for apprenticeships? Options are being considered, such as using the pay-as-you-earn system, or grants and vouchers. Do you, as an employer, have a view about which of those models you would prefer?
James Duddridge (Conservative, Rochford and Southend East)
May I ask you about the implementation? By way of context, I thank you for all the work you are doing. In Southend, which I represent, there is a college in which 600 apprentices are being trained. There is also London Southend airport, which, specifically on the aviation side, has well over 100 apprenticeships, and is fantastic.
I am concerned, because from our perspective this is a carry-over Bill, which technically means that it will take quite a while to become law. It may become law quite close to the general election, depending on how the Government timetable it, and I am conscious that you have term times. In my mind, it looks like these things will be implemented in September 2016. Is that the timeline, or can anything be done to bring forward some of the work so we can see the benefits earlier?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
Just to go back to the issue of how employers should receive funding, do you see that there is any greater risk of fraud attached to any of the options that are being considered? For example, if the Government go down the route of having a direct grant, what sort of checks, balances and controls would there have to be to ensure that the employer is actually using it?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
So you do not think any of the options that are being considered are more at risk of fraud than any of the others.
Jimmy Hood (Labour, Lanark and Hamilton East)
If there are no further questions from Members, we will move on to the next panel of witnesses. I thank you for your evidence, Mr Hamer.
Examination of Witnesses
Jimmy Hood (Labour, Lanark and Hamilton East)
We will now hear oral evidence from R3 and the Union of Shop, Distributive and Allied Workers. We will have to complete this session by 11.25 am. I invite the witnesses to introduce themselves for the record.
Jimmy Hood (Labour, Lanark and Hamilton East)
Thank you. Welcome.
Toby Perkins (Labour, Chesterfield)
Let me start with Andrew, if I may. R3 is the body representing insolvency practitioners. Presumably you have been involved in the germ of the idea of clause 10 as it came through. Will you talk us through where the idea came from and what your involvement was at the point at which R3 was consulted on the recommendations?
Toby Perkins (Labour, Chesterfield)
On clause 10, what does your organisation think will be the positive and/or negative implications of splitting up corporate and personal work?
Toby Perkins (Labour, Chesterfield)
To clarify—if I have understood you correctly—you are the organisation responsible for representing insolvency practitioners, who presumably are the people we want to benefit from the deregulation. You are saying that it is not deregulatory, and 90% of your members would not train someone to take a partial licence. Can you see any advantages to it?
Toby Perkins (Labour, Chesterfield)
But you are saying that we should scrap clause 10, which directly applies to you?
Toby Perkins (Labour, Chesterfield)
You also mentioned small insolvency practitioners. As I understand it, the Government want to move to a kind of easyJet, “make yourself insolvent in 15 minutes” approach. Can you take me through what you think the impact of that will be? To what extent will the proposed changes benefit small insolvency practitioners, and to what extent will more of the business go to larger insolvency practitioners?
Toby Perkins (Labour, Chesterfield)
May I suggest, Mr Hood—obviously we have two witnesses who are dealing with very different clauses—that we give people an opportunity to quiz Andrew on clause 10 and then go on to clause 2, or that I finish off by doing clause 2 first? The clause 2 questions would be to Louise.
Jimmy Hood (Labour, Lanark and Hamilton East)
The hon. Member can ask his questions to the witnesses as long as it is relevant to the evidence that we want to get.
Toby Perkins (Labour, Chesterfield)
So I can go on to Louise now on clause 2?
Jimmy Hood (Labour, Lanark and Hamilton East)
Of course you can, but I just make the point that there are other people who want to ask questions.
Toby Perkins (Labour, Chesterfield)
So you want to just go between the two. On Clause 2 then, from USDAW’s perspective, can you talk us through any negative consequences for businesses resulting from wider recommendations, or indeed any positive aspects resulting from businesses being advised about why there were recommendations coming from tribunal verdicts?
Andrew Bingham (Conservative, High Peak)
I want to return to Andrew and insolvency; you dealt with one or two of the points that I was going to raise when you answered Toby’s questions. You talked about personal and corporate insolvency and you said that maybe somebody could come to you and you would end up doing both. Have you had a lot of experience of that? When someone comes to you with a corporate insolvency case, how many times, as a rule of thumb, does it spill into a personal insolvency issue?
Andrew Bingham (Conservative, High Peak)
So with what I will call the twin-track authorisation, if that is what we want to call it, do you think smaller firms will do either/or but not both, and so it could disadvantage small insolvency practices over the big firms—is that what you are saying?
Andrew Bingham (Conservative, High Peak)
Do you not see it as one of the merits of the Bill that you would end up with quite a few small insolvency practitioners who specialise particularly in personal insolvency, thereby making it more accessible and easier for people? Obviously a corporate insolvency is a bigger thing. I ran a business, and thank God I never needed an insolvency practitioner, but people in business are aware of a lot of the pitfalls and the ins and outs. But personal insolvency is a very different animal. Do you not think that the twin system will mean easier access for personal insolvency and perhaps smaller practices?
Andrew Bingham (Conservative, High Peak)
What would you say to a system whereby insolvency practitioner A, who deals in personal insolvency, has an agreement with insolvency practitioner B, who deals with corporate insolvency, so that if somebody comes to practitioner A or practitioner B and there is a spillover, there is a relationship that can give the full service anyway?
Chris Williamson (Labour, Derby North)
This is a question for Louise about clause 2. Can you say a little about your assessment of the impact of the wider recommendations on other employers who are not party to the particular case that led to the wider recommendation being made? Is there any evidence that this has had an impact on the practice of other employers, other than the ones party to the case?
Chris Williamson (Labour, Derby North)
Do you think it might have the effect of preventing the need for tribunal cases to be taken against other employers who may benefit from the wider recommendations made in a different tribunal?
Chris Williamson (Labour, Derby North)
So it could therefore be beneficial for workers and other employers?
Jimmy Hood (Labour, Lanark and Hamilton East)
We have four Members indicating that they want to ask questions and we have 12 minutes left.
Q 92I have a quick question for Mr Tate. The Office of Fair Trading issued a report in June 2010 indicating that the corporate insolvency market was not functioning very well. Was that a report whose findings are fully accepted?
James Duddridge (Conservative, Rochford and Southend East)
I understand the linkage between business and personal insolvency, but I am unsure the other way. If I was personally insolvent, why would I need somebody who understood business?
James Duddridge (Conservative, Rochford and Southend East)
Have you a sense of the figure of business insolvencies relating to personal insolvencies? If 60% of personal insolvencies were linked to business insolvencies, that would strengthen your case. I am guessing it is nearer 20%—forgive me, but this is not my area.
James Duddridge (Conservative, Rochford and Southend East)
But if I know that I have no business interests and I am already tight for money—clearly: I am insolvent—why would I want to pay someone who was also fully trained up in business? I know it is at the margin, but I would naturally be paying more for that better person.
Oliver Heald (Conservative, North East Hertfordshire)
In the bulk of your membership, is it the small insolvency practitioners who do a bit of both?
Oliver Heald (Conservative, North East Hertfordshire)
Would you not agree that greater competition and specialisation in the insolvency practitioner marketplace has the potential to lower fees and mean greater returns for creditors?
Oliver Heald (Conservative, North East Hertfordshire)
If these charities and the larger firms want to specialise, why should they not?
Oliver Heald (Conservative, North East Hertfordshire)
What are the typical training costs charged by the main education providers for each of the three Joint Insolvency Examination Board insolvency papers?
Oliver Heald (Conservative, North East Hertfordshire)
Pro rata?
Oliver Heald (Conservative, North East Hertfordshire)
Perhaps it would be acceptable for you to write to the Committee as you offered.
Oliver Heald (Conservative, North East Hertfordshire)
Turning to USDAW and the wider recommendations, the survey done in 2008 showed that most employers who lost in the tribunal did make changes. Therefore, why is it necessary to have wider recommendations?
Oliver Heald (Conservative, North East Hertfordshire)
About 250,000 cases a year are lodged and just less than half of those involve equalities issues of some sort or another. As you say, not that many get to a hearing. However, in the 20 cases a year where the wider recommendations are made, they are all of the same sort: for training.
Oliver Heald (Conservative, North East Hertfordshire)
The wider recommendations are unenforceable anyway.
Oliver Heald (Conservative, North East Hertfordshire)
They do that anyway. If there is a finding against them and they do not make any changes, a month later they are up at the tribunal again. That is, of course, something that would be bad for them.
Oliver Heald (Conservative, North East Hertfordshire)
That is what we are aiming for, is it not? The point is that for employers there is a concern that these wider recommendations could be burdensome and could put employers off defending cases that they really should defend because the merits are not there. What do you say to that?
Oliver Heald (Conservative, North East Hertfordshire)
There is a difference between striking out a claim as completely meritless and having a claim that you want to defend and feel you have good reasons to defend, but do not because you are put off by this sort of extra burden, is there not?
Oliver Heald (Conservative, North East Hertfordshire)
I realise USDAW may want people to settle, but the fact is that if you are an employer, you might not want to, but these extra burdens might force you to. That is the concern.
Jimmy Hood (Labour, Lanark and Hamilton East)
May I just make the point that the Minister is not giving evidence? The Minister is supposed to be asking questions; the witness is giving evidence.
Toby Perkins (Labour, Chesterfield)
Andrew, a previous witness described a previous clause as a solution in search of a problem. In the context of clause 10, I am slightly mystified by how we have got to this point, given the evidence that you and your organisation have raised. Can you lead us to what problem is being solved here? Members have made the suggestion, “Can’t two different organisations work together? Can’t we create a partnership?” At the moment we do not need that. We are here: the Government are already looking at other forms of insolvency policy and will, we believe, bring an insolvency Bill forward. This is purely a deregulatory Bill. Can you lead us to any evidence to show how this will be deregulatory or what problem it is trying to solve? Is this indeed a solution in search of a problem?
Andrew Bridgen (Conservative, North West Leicestershire)
Andrew, I put it to you that there must be a lot more personal insolvencies than there ever are corporate insolvencies—a huge number more: 10, 20, 30 times more. Would you be more supportive of the clause if, instead of an either/or, personal or corporate specialisation, all insolvency practitioners had to do personal first and then moved to corporate? They would be open to the larger market. Surely you can see from the Government’s point of view, as regards the competition and efficiency savings—you have used health analogies—that having a full blown insolvency practitioner for most personal insolvencies, which are probably very straightforward, is rather like having a brain surgeon clipping a patient’s toenails. It is not a good use of resources.
Andrew Bridgen (Conservative, North West Leicestershire)
Would you be more supportive of a tiered qualification of personal first and then corporate, rather than the either/or?
Jimmy Hood (Labour, Lanark and Hamilton East)
I am afraid that brings us to the end of the time allotted to the Committee for this morning’s session. I thank the witnesses on behalf of the Committee for their evidence.
Christopher Chope (Conservative, Christchurch)
Good afternoon. Thank you for coming along and joining us, Janet Davis and Sarah Slade. Would you like to introduce yourselves briefly?
Christopher Chope (Conservative, Christchurch)
Thank you. I think you know the rules of engagement. If you can keep your answers brief, that would be helpful. We have to finish by 2.30 pm. Our first questioner is Thomas Docherty. Fire away.
Thomas Docherty (Labour, Dunfermline and West Fife)
It is a pleasure to serve under your chairmanship, Mr Chope. The working group is still ruminating upon a number of issues. Do you anticipate that those would result in further proposed amendments to the Bill?
Thomas Docherty (Labour, Dunfermline and West Fife)
We are now into a live Bill process. What is your anticipated out date for proposed amendments? You look slightly puzzled. If further amendments were to be proposed, that would have to be done quickly to be debated in the House of Commons.
Thomas Docherty (Labour, Dunfermline and West Fife)
When do you expect to have reached conclusions on those issues?
Thomas Docherty (Labour, Dunfermline and West Fife)
Do you think that you would be looking more at statutory guidance than primary legislation?
Thomas Docherty (Labour, Dunfermline and West Fife)
Looking ahead 12 years to the 2026 deadline, do you think the present system will have to change if we are to ensure that no unrecorded rights of way fall off the edge? You will probably be aware that there is a difference of opinion about unrecorded rights of way, particularly with the use by the automotive industry for rallying and so on. Can you comment on whether further legislation is required or amendments needed?
David Rutley (Conservative, Macclesfield)
I hope that the courtesies have been observed that we talked about earlier. That is tremendous. Some of the points that I wanted to raise have already been covered. It is a credit to the working group that bodies as diverse as the CLA and the Ramblers are working closely together. There seems to be a broad consensus that this is the right way forward. It would be good to hear from panel members whether that is your continued view, given the passage of time.
My other question is whether you can help those of us who were not on the Joint Committee and who are not as familiar with some of the issues as those who have been involved with it and been in dialogue with you before. How will the proposals help with the mapping process?
Jim Shannon (DUP, Strangford)
I want to ask a question relating to the discussions that you have had with the Country Land and Business Association, the Countryside Alliance, the British Association for Shooting and Conservation and other shooting groups. I am keen to get your opinion on how you can work better with those shooting groups to ensure that they can enjoy their sport and that safety is paramount. My impression of shooting organisations and groups is that they are not confrontational—they want to get on with people—but they also want to enjoy their sport. Can you give us some indications of what your discussions have been with those organisations?
Jim Shannon (DUP, Strangford)
With respect, it seems to me unusual not to have had any discussions with three organisations that have a substantial numbers of members across the United Kingdom who have an interest in the land that they use for recreational sport, and the impact that the process might have, for instance, on their having the right of way through a piece of land on one of their shoot days. Those are critical issues for such organisations. I am keen to see whether those viewpoints have been taken on board. I would be disappointed if they had not been, for whatever reason.
Jim Shannon (DUP, Strangford)
Is the onus then on the CLA and the Countryside Alliance to contact you, or could I ask you to contact them?
Jim Shannon (DUP, Strangford)
And the Countryside Alliance?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
I want to come back to the possibility of amendments. Janet Davis, you have said that the Ramblers would not be pushing any amendments. Sarah Slade, you mentioned things such as vehicular access and whether there was a way of resolving that, which might or might not involve amendments. Is the CLA considering tabling amendments, or might other members of your working group be thinking of putting forward amendments?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
I was not thinking exclusively of amendments to do with vehicular access. There may be others. I would have thought that as a working group, you might collectively have identified areas where some of the different organisations in the group might want to push a particular agenda.
Tom Brake (Liberal Democrat, Carshalton and Wallington)
That is what I was going to ask. Is your starting point that you try to get agreement within the stakeholder group to go forward with those proposals, but if you do not get it, you go forward with them anyway?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
Have you been able to make any assessment of whether that runs the risk of unpicking the whole package?
Tom Brake (Liberal Democrat, Carshalton and Wallington)
Is that your view, Janet Davis?
Christopher Chope (Conservative, Christchurch)
Thank you very much indeed for coming along and helping us with your evidence this afternoon.
Christopher Chope (Conservative, Christchurch)
Good afternoon. We have two representatives from the Local Government Association. Councillor Ed Turner first: could you please introduce yourself?
Thomas Docherty (Labour, Dunfermline and West Fife)
If I can talk first about the reduction of the qualifying period for the right to buy, what assessment has been made of the impact on local authority finances of reducing the period? Specifically, what estimate, if any, has been made of the impact on the ability to build fresh housing stock?
John Cryer (Labour, Leyton and Wanstead)
Following on from what you said, I think the ratio between the number of council homes being sold to those being built is about 7:1. Do you think that will widen over the next few years if this change goes through?
John Cryer (Labour, Leyton and Wanstead)
Most of my constituency is in Waltham Forest in the east end of London. The housing waiting list is something like 24,000 and it is likely to get higher. Do you think this measure will increase the rapidity of the increase?
James Duddridge (Conservative, Rochford and Southend East)
Forgive me, I do not know how the LGA works. As a Labour councillor, are you representing a Labour position or the LGA position? I genuinely do not know whether the officer positions are mixed and this is a common position. How does it work?
James Duddridge (Conservative, Rochford and Southend East)
As a supplementary, I was unsure whether three years was right. I was thinking of a lower threshold—perhaps two years; other people might think of four years. In an ideal world, where would you at the LGA set it? Would you have the change but perhaps go beyond five years? I am thinking of tabling an amendment around two. If you were in my position, would you increase that to seven, nine, 10?
James Duddridge (Conservative, Rochford and Southend East)
What do you do in Oxford?
Thomas Docherty (Labour, Dunfermline and West Fife)
On the issue of replacements, could I tease out of you what impact, if any, has been assessed on whether or not you would see like-for-like replacements? Or would you see smaller properties being built because perhaps the funding streams are of that effect within your business plan?
Thomas Docherty (Labour, Dunfermline and West Fife)
Yes.
Chris Williamson (Labour, Derby North)
Councillor Turner, you suggested that one consequence of this policy would be an increase in the number of people going into private rented accommodation, because there would be fewer council houses available. Has the LGA made an assessment of the cost to the public purse of requiring more people to rent in the private sector rather than being able to access council housing?
Chris Williamson (Labour, Derby North)
At the moment, according to the House of Commons Library, about £9.5 billion is spent on housing benefit in the private rented sector. It would be helpful if the LGA could let us know what additional cost will be added by this policy going forward. Do you know how many people are currently on the housing register across England, and do you know what the likely increase in that number would be as a consequence of fewer council houses being available because they are being sold more quickly?
Chris Williamson (Labour, Derby North)
Finally, we are considering the Deregulation Bill—do you consider this to be a deregulatory measure?
Andrew Bridgen (Conservative, North West Leicestershire)
In my constituency, following the ending of the spare room subsidy it is clear that we have too many four-bedroom council properties and not enough with one and two bedrooms. Do you agree that the Bill could be a catalyst for rebalancing that stock, bringing it back by releasing larger properties on to the market, getting the receipt, and being able to replace them with more one and two-bedroom units, which are obviously what people need?
Thomas Docherty (Labour, Dunfermline and West Fife)
I would like to bring you back to the business plan because you touched on it earlier. Will you say a little more about what estimate the LGA has made of how the change—going down to three or even two years—would affect the housing revenue account business plans?
Oliver Heald (Conservative, North East Hertfordshire)
The number of people who have the right to buy sooner is 2,700. Do you acknowledge that there is a huge desire among tenants to own their own home?
Oliver Heald (Conservative, North East Hertfordshire)
But the aim of the policy is to allow all these people this opportunity sooner. That would be an additional 2,750 people, it is estimated, in 2014-15, who would get the chance to own their own home—and on the basis that the receipts would make possible a one-for-one replacement of every additional right-to-buy unit sold. If that is the policy, do you disagree with it?
Oliver Heald (Conservative, North East Hertfordshire)
So we agree.
Oliver Heald (Conservative, North East Hertfordshire)
Between April and September 2013 there were discussions between local authorities, housing associations, the LGA, London councils, the Council of Mortgage Lenders, the Financial Conduct Authority, the Building Societies Association and the National Housing Federation about the proposals. Is that correct?
Oliver Heald (Conservative, North East Hertfordshire)
So were you there at those meetings?
Oliver Heald (Conservative, North East Hertfordshire)
Because there were no concerns raised on the clause during those discussions; and I was just going to ask you why not, if you are so much against them.
Christopher Chope (Conservative, Christchurch)
Does anyone want to ask any questions about clauses 54 to 57?
Chris Williamson (Labour, Derby North)
Clause 54 is “Repeal of duty to prepare sustainable community strategy”. I just wondered what you think the impact of that clause will be on local authorities around the country.
Chris Williamson (Labour, Derby North)
Do you think, then, that that particular provision of the existing legislation has not really made much difference?
Chris Williamson (Labour, Derby North)
So you think that local authorities would probably still produce their own where appropriate, do you?