16 Oct 2012 : Column 184

Enterprise and Regulatory Reform Bill (Programme) (No. 2)

1.39 pm

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson): I beg to move,

That the Order of 11 June 2012 (Enterprise and Regulatory Reform Bill (Programme)) be varied as follows:

1. Paragraphs 4 and 5 of the Order shall be omitted.

2. Proceedings on Consideration and Third Reading shall be completed in two days.

3. Proceedings on Consideration shall be taken in the order shown in the first column of the following Table.

4. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

TABLE

Proceedings

Time for conclusion of proceedings

New Clauses relating to civil liability for the breach of health and safety duties; new Clauses and new Schedules relating to the determination of bankruptcy applications by adjudicators.

4.15 pm on the first day

New Clauses relating to the Equality Act 2010.

6.00 pm on the first day

New Clauses relating to the regulation of estate agents; new Clauses and new Schedules relating to listed buildings and amendments to Schedule 16; new Clauses relating to the Osborne estate.

7.00 pm on the first day

New Clauses and new Schedules relating to, and amendments to, Part 2; new Clauses and new Schedules relating to, and amendments to, Part 1.

4.00 pm on the second day

Amendments to Clauses 61 to 64; amendments to Part 6 (other than amendments to Clauses 61 to 64); remaining new Clauses and remaining new Schedules relating to, and amendments to, Part 5 (other than amendments to Schedule 16); new Clauses and new Schedules relating to, and amendments to, Parts 3 and 4; remaining new Clauses; remaining new Schedules; remaining proceedings on Consideration.

6.00 pm on the second day

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 7.00 pm on the second day.


The Bill aims to promote long-term growth and simplify regulation. The Government have tabled new clauses, introducing a number of further measures to improve regulation, and amendments, which followed from the useful and detailed deliberations in Committee. The Government recognise the importance of the Bill and of the new measures that have been added, so we have provided two days for Report and Third Reading. The first day is for the consideration of new areas that we propose be added to the Bill. On the second day,

16 Oct 2012 : Column 185

we will deal with amendments to the existing clauses, as well as other new clauses that have been suggested. We have provided for an order that takes into account the issues that Labour Members have told us they particularly wish to focus on.

We have provided for timetabling of the two days. We can, of course, go faster than the timetable set out, but this arrangement will ensure that the debate is not too drawn out on any specific areas and so we will be able to cover the entirety of the Bill appropriately. We have provided to Opposition Members, and also placed in the Library of the House and on the Department for Business, Innovation and Skills website, an explanation of all the Government amendments, which is in line with the new procedures that the Leader of the House has been keen to encourage on Report. Such an approach builds on the requests made and the work encouraged by the hon. Member for Brighton, Pavilion (Caroline Lucas), as well as others from across the parties in this House. We have also provided a short summary, as will now be done for all Bills in the future. We hope that that will help to facilitate understanding and the debate.

1.40 pm

Mr Chuka Umunna (Streatham) (Lab): I do not intend to speak for long. As I said on Second Reading, this really is a mishmash of a Bill; it is a missed opportunity and it certainly does not provide the compelling vision or plan for growth that we need. Its provisions range widely from the setting up of the green investment bank to extending the primary authority scheme; and from reforming our entire competition regime to implementing measures relating to the Osborne estate—for the avoidance of doubt, I should say that that does not refer to the estate of the Chancellor of the Exchequer. In what has been labelled an “enterprise Bill”, this Government are seeking to make fundamental changes not only to the rights at work of every person in this country, but to the remit of the body charged in this country with promoting human rights and a society free from discrimination.

I am grateful that two days have been given for the debate of the remaining stages of this Bill, including the extra 15 minutes afforded for the debate of the measures relating to the Equality and Human Rights Commission —we must be grateful for small mercies. However, given the sheer variety of issues covered, which do not all hang together, and the seriousness of the changes envisaged to people’s basic rights in this Bill, the time that has been given to debate it is simply insufficient. That is all the more the case in the light of the Government’s last-minute new clauses, which seek to abolish the provisions of the Equality Act 2010 relating to third-party harassment of employees—no trivial matter—and other provisions, including those relating to discrimination questionnaires. Those provisions relate to ensuring that employees can work free from sexual, racial or other harassment, and they should be properly debated in a timely fashion.

In the light of everything I have just said, the lack of time afforded is thrown into particular sharp relief when we look at the running order for the second day —tomorrow—when a raft of provisions relating to people’s rights at work will be debated in the same breath as measures establishing a green investment bank. The House is expected to do all that in less than two hours. So it is for this reason that the Opposition oppose today’s programme motion.

16 Oct 2012 : Column 186

Question put,

The House divided:

Ayes 273, Noes 217.

Division No. 71]

[1.44 pm

AYES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Amess, Mr David

Andrew, Stuart

Arbuthnot, rh Mr James

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldry, Sir Tony

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Beresford, Sir Paul

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brokenshire, James

Brooke, Annette

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burley, Mr Aidan

Burns, Conor

Burns, rh Mr Simon

Burstow, rh Paul

Burt, Alistair

Burt, Lorely

Byles, Dan

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Chishti, Rehman

Chope, Mr Christopher

Clarke, rh Mr Kenneth

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Crockart, Mike

Crouch, Tracey

Davies, David T. C.

(Monmouth)

Davies, Glyn

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorrell, rh Mr Stephen

Dorries, Nadine

Drax, Richard

Duddridge, James

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Farron, Tim

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fuller, Richard

Gale, Sir Roger

Garnier, Mark

Gauke, Mr David

George, Andrew

Gibb, Mr Nick

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, rh Damian

Grieve, rh Mr Dominic

Griffiths, Andrew

Gyimah, Mr Sam

Halfon, Robert

Hammond, Stephen

Hancock, Matthew

Hands, Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Hayes, Mr John

Heald, Oliver

Heath, Mr David

Hemming, John

Henderson, Gordon

Hendry, Charles

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Horwood, Martin

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Huhne, rh Chris

Hunter, Mark

Huppert, Dr Julian

Jackson, Mr Stewart

James, Margot

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Jones, Andrew

Jones, Mr Marcus

Kelly, Chris

Kennedy, rh Mr Charles

Kirby, Simon

Knight, rh Mr Greg

Laing, Mrs Eleanor

Lamb, Norman

Lancaster, Mark

Lansley, rh Mr Andrew

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Lefroy, Jeremy

Leigh, Mr Edward

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, Dr Julian

Lilley, rh Mr Peter

Lloyd, Stephen

Lord, Jonathan

Loughton, Tim

Lumley, Karen

Macleod, Mary

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McIntosh, Miss Anne

McPartland, Stephen

McVey, Esther

Menzies, Mark

Metcalfe, Stephen

Mills, Nigel

Milton, Anne

Mitchell, rh Mr Andrew

Moore, rh Michael

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Murrison, Dr Andrew

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Norman, Jesse

Nuttall, Mr David

O'Brien, Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, Richard

Paice, rh Sir James

Parish, Neil

Paterson, rh Mr Owen

Pawsey, Mark

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Pickles, rh Mr Eric

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pugh, John

Randall, rh Mr John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reid, Mr Alan

Rifkind, rh Sir Malcolm

Robertson, rh Hugh

Robertson, Mr Laurence

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Sharma, Alok

Shelbrooke, Alec

Simmonds, Mark

Skidmore, Chris

Smith, Miss Chloe

Smith, Henry

Smith, Julian

Smith, Sir Robert

Spencer, Mr Mark

Stanley, rh Sir John

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Syms, Mr Robert

Teather, Sarah

Thurso, John

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Vara, Mr Shailesh

Vickers, Martin

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Walter, Mr Robert

Ward, Mr David

Watkinson, Angela

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Tellers for the Ayes:

Jenny Willott and

Stephen Crabb

NOES

Abbott, Ms Diane

Abrahams, Debbie

Ainsworth, rh Mr Bob

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Ashworth, Jonathan

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blenkinsop, Tom

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Campbell, Mr Alan

Chapman, Jenny

Clarke, rh Mr Tom

Coaker, Vernon

Coffey, Ann

Connarty, Michael

Cooper, Rosie

Cooper, rh Yvette

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Curran, Margaret

Dakin, Nic

David, Wayne

Davidson, Mr Ian

Davies, Geraint

De Piero, Gloria

Dobbin, Jim

Dobson, rh Frank

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Engel, Natascha

Esterson, Bill

Evans, Chris

Field, rh Mr Frank

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Francis, Dr Hywel

Galloway, George

Gapes, Mike

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Goggins, rh Paul

Goodman, Helen

Greatrex, Tom

Green, Kate

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hermon, Lady

Heyes, David

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hood, Mr Jim

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kaufman, rh Sir Gerald

Keeley, Barbara

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewis, Mr Ivan

Lloyd, Tony

Llwyd, rh Mr Elfyn

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

MacNeil, Mr Angus Brendan

MacShane, rh Mr Denis

Mactaggart, Fiona

Mahmood, Shabana

Malhotra, Seema

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Mearns, Ian

Michael, rh Alun

Miliband, rh David

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morrice, Graeme

(Livingston)

Morris, Grahame M.

(Easington)

Mudie, Mr George

Munn, Meg

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Pound, Stephen

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Jamie

Reeves, Rachel

Reynolds, Emma

Riordan, Mrs Linda

Ritchie, Ms Margaret

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sarwar, Anas

Seabeck, Alison

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Spellar, rh Mr John

Stringer, Graham

Stuart, Ms Gisela

Tami, Mark

Thomas, Mr Gareth

Thornberry, Emily

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, Valerie

Walley, Joan

Watts, Mr Dave

Weir, Mr Mike

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Williamson, Chris

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Noes:

Phil Wilson and

Yvonne Fovargue

Question accordingly agreed to.

16 Oct 2012 : Column 187

16 Oct 2012 : Column 188

16 Oct 2012 : Column 189

16 Oct 2012 : Column 190

Enterprise and Regulatory Reform Bill

[1st Allocated Day]

Consideration of Bill, as amended in the Public Bill Committee.

New Clause 14

Civil liability for breach of health and safety duties

‘(1) Section 47 of the Health and Safety at Work etc. Act 1974 (civil liability) is amended as set out in subsections (2) to (7).

(2) In subsection (1), omit paragraph (b) (including the “or” at the end of that paragraph).

(3) For subsection (2) substitute—

“(2) Breach of a duty imposed by a statutory instrument containing (whether alone or with other provision) health and safety regulations shall not be actionable except to the extent that regulations under this section so provide.

(2A) Breach of a duty imposed by an existing statutory provision shall not be actionable except to the extent that regulations under this section so provide (including by modifying any of the existing statutory provisions).

(2B) Regulations under this section may make provision about the extent to which breach of a duty imposed by other health and safety legislation is actionable (including by modifying that legislation).

(2C) The reference in subsection (2B) to “other health and safety legislation” is to—

(a) any provision of an enactment which relates to any matter relevant to any of the general purposes of this Part but is not among the relevant statutory provisions; and

(b) any provision of an instrument made or having effect under any such enactment as is mentioned in paragraph (a) other than a provision of a statutory instrument that contains (with other provision) health and safety regulations.

(2D) Regulations under this section may include provision for—

(a) a defence to be available in any action for breach of the duty mentioned in subsection (2), (2A) or (2B);

(b) any term of an agreement which purports to exclude or restrict any liability for such a breach to be void.”

(4) In subsection (3), omit the words from “, whether brought by virtue of subsection (2)” to the end.

(5) In subsection (4)—

(a) for “and (2)” substitute “, (2) and (2A)”, and

(b) for “(3)” substitute “(2D)(a)”.

(6) Omit subsections (5) and (6).

(7) After subsection (6) insert—

“(7) The power to make regulations under this section shall be exercisable by the Secretary of State.

(8) The Secretary of State must obtain the consent of the Welsh Ministers before making any regulations by virtue of subsection (2B) that contain provision which would be within the legislative competence of the National Assembly for Wales if it were contained in an Act of the Assembly.”

(8) In section 82 of the Health and Safety at Work etc. Act 1974 (general provisions as to regulations)—

(a) in subsection (3), after “subsection (4)” insert “or (5)”, and

(b) after subsection (4) insert—

“(5) A statutory instrument containing (whether alone or with other provision) regulations made by virtue of section 47(2B) shall not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”

16 Oct 2012 : Column 191

(9) Where, on the commencement of this section, there is in force an Order in Council made under section 84(3) of the Health and Safety at Work etc. Act 1974 that applies to matters outside Great Britain any of the provisions of that Act that are amended by this section, that Order is to be taken as applying those provisions as so amended.

(10) The amendments made by this section do not apply in relation to breach of a duty which it would be within the legislative competence of the Scottish Parliament to impose by an Act of that Parliament.

(11) The amendments made by this section do not apply in relation to breach of a duty where that breach occurs before the commencement of this section.’.—(Matthew Hancock.)

Brought up, and read the First time.

1.58 pm

The Parliamentary Under-Secretary of State for Skills (Matthew Hancock): I beg to move, That the clause be read a Second time.

Mr Deputy Speaker (Mr Nigel Evans): With this it will be convenient to discuss Government amendment 34.

Matthew Hancock: Government new clause 14 relates to civil liability for breaches of health and safety duties. It fulfils our commitment in the Budget to introduce measures to reduce the burden of health and safety, following the recommendations made in the independent Löfstedt report. Professor Löfstedt considered the impact that the perception of a compensation culture has had in driving over-compliance with health and safety at work regulations. The fear of being sued drives businesses to exceed what is required by the criminal law, diverting them from focusing on sensible preventive health and safety management and resulting in unnecessary costs and burdens.

Professor Löfstedt identified the unfairness that can arise when health and safety at work regulations impose a strict duty on employers that makes them liable to pay compensation to employees injured or made ill by their work, despite all reasonable steps having been taken to protect them from harm. Employers can, for example, be held liable for damages when an injury is caused by equipment failure, even when a rigorous examination would not have revealed the defect. The new clause is designed to address that and other unfair consequences of the existing health and safety system.

We all have different reasons for coming into politics. When I was growing up, I had one of the experiences that brought me to this place, concerning the over-burdensome intervention of health and safety officers. I worked in a family computer software company when an over-long health and safety investigation took place, which took up huge amounts time for the officers and senior management. The only result at the end of it was the recommendation that some bleach in a cupboard must be labelled correctly. After a sign was put up saying, “There is bleach in the cupboard. Please do not drink it,” the company was passed under the health and safety regulations.

These changes will ensure that there is a reasonableness defence in the consideration of some health and safety cases.

Guy Opperman (Hexham) (Con): I am enjoying the march back through time to the Minister’s computer existence. I speak as a former health and safety barrister—on

16 Oct 2012 : Column 192

behalf of the prosecution, I should say. I welcome the changes recommended in the independent report. Is not what we are trying to do to bring flexibility and fairness to a system that is too old and defunct?

Matthew Hancock: We are ensuring that due health and safety measures are protected, but that there is a test of reasonableness for the actions of employers, so that those who have taken all reasonable precautions cannot be prosecuted for a technical breach. That will reduce the impression among many businesses, especially small businesses, that they are liable to health and safety legislation in many cases when they are not. It will reduce that impression while ensuring that taking reasonable steps to abate health and safety difficulties remains a vital part of everybody’s responsibilities. Indeed, the new clause does not change the criminal procedures in relation to health and safety.

How do we propose to do this? Civil claims for personal injury can be brought by two routes: a breach of the common-law duty of care, in which case negligence has to be proved, or a breach of statutory duty, in which case the failure to meet the particular legal standard alleged to have been breached has to be proved. The new clause will amend the Health and Safety at Work etc. Act 1974 to remove the right to bring civil claims for breach of a statutory duty contained in certain health and safety legislation.

John Cryer (Leyton and Wanstead) (Lab): As I am sure the Minister knows, the 1974 Act is riddled with the phrase

“so far as is reasonably practicable”.

Does that not give the protection against flimsy claims that he has been talking about?

Matthew Hancock: The 1974 Act does not give that protection, because a test of negligence is not required to proceed with a prosecution. In future, proof of negligence will be required to bring a case. It will be possible to bring a civil action for a breach of common law duty of care only on the basis that the employer has been negligent.

Claire Perry (Devizes) (Con): I am enjoying the Minister’s attention to detail on this important matter. Will he reassure us that this provision will not add to the burden for small businesses because of the process of providing proof? Has he done any number crunching to show what it will mean for the businesses that matter so much to Britain?

Matthew Hancock: My hon. Friend anticipates my speech, because this provision will reduce the burdens on business. It is difficult to know precisely by how much because businesses react not only to the letter of the law, but to the perception of the law. There are perceived health and safety requirements that go beyond technical breaches of the law, and we want to remove them. One can go to the new Government website and ask whether something is required by health and safety legislation. Many of the cases that are brought to the Government’s attention are not required by health and safety legislation. The problem is the perception of

16 Oct 2012 : Column 193

health and safety legislation. By including a reasonableness defence, we will help to remove the implied, expected and perceived burdens on business.

Julian Smith (Skipton and Ripon) (Con): When my hon. Friend became a Minister, what assessment did he make of the previous Labour Government’s attempts to lift the burdens on business and the perception of those burdens over the 13 years that they were in office?

Matthew Hancock: I have found no evidence of that. If my hon. Friend can point any out to me, I would be extremely grateful.

David Rutley (Macclesfield) (Con): I welcome the direction in which the Minister is taking the debate and the policy. I will never forget a conversation that I had in Macclesfield marketplace, a place with which I know he is familiar. A lady told me how disturbed she was that the perception of health and safety was giving it a bad name. I asked who she worked for and she said the Health and Safety Executive. The situation is going too far. Does the Minister agree that it is important to move to a common-sense approach, which I think is the direction in which he is taking Government policy?

Matthew Hancock: It is important to have a health and safety framework in which responsible businesses act in a way that supports and enhances the safety of the people who work for them. Indeed, it is vital that we all have a duty to behave reasonably on questions of health and safety.

I hope that making negligence a requirement before a health and safety case can be brought will mean that those who behave reasonably have no reason to fear health and safety legislation and that those who think carefully and responsibly about the businesses that they run will know that they are behaving not only reasonably, but lawfully.

Chris Kelly (Dudley South) (Con): I thank the Minister for his speech. Does he agree that the managers of companies who are acting reasonably will be freed up to go out and win more export business, including those in the manufacturing and engineering companies in my constituency of Dudley South?

Matthew Hancock: Indeed, this action will reduce the burdens on business and help Britain to compete. It also provides important reassurance to employers that they will be liable to pay compensation only when it can be proved that they have been negligent.

Jim Sheridan (Paisley and Renfrewshire North) (Lab): I well recall when I worked in the shipyards watching the white particles of dust and asking whether they had any health and safety implications, only for the employer to tell me, “Don’t be stupid. Get on with your lot, young man. It won’t do you any harm.” Hundreds of thousands of people are now suffering from mesothelioma. Is that the kind of employer that the Minister wants to support?

Matthew Hancock: The hon. Gentleman gives a good explanation of why there is cross-party support for health and safety measures that are reasonable. After all, it was a Conservative Government who brought in

16 Oct 2012 : Column 194

the Factory Acts. On the specific point that he raises, the provision is forward looking and is not retrospective. It will not have an impact on acts that were committed in the past, but is about actions that take place in the future. He raises an important question and I hope that I have reassured him.

Mr David Anderson (Blaydon) (Lab): I thank the Minister for giving way; he is being very helpful. Will he clarify whether there is currently—or will be in the legislation—a legal definition of what “reasonable” actually means?

Matthew Hancock: The definition of reasonableness will come from the common law interpretation, and the concept is already well regarded and specified in law.

The new clause makes a significant contribution to the Government’s reform of civil litigation to redress the balance between claimants and defendants. It is good for Britain’s competitiveness, reduces burdens on businesses, and strengthens and underpins our health and safety system, thereby ensuring that people think it is fit for purpose.

Julie Hilling (Bolton West) (Lab): I am concerned by the Minister’s remarks because far too many people are already killed at work each year, and people are also injured through faulty or wrong seating and other things that happen. The office is not a safe working space, and when the Minister says that we worry too much about health and safety, I am worried that we will make things far worse for people not only in heavy industry but in other working situations. Health and safety legislation exists to protect those people from back injury, repetitive strain injury and all the other things that occur. This legislation will completely reduce that issue in people’s minds.

Matthew Hancock: On the contrary, although I share the hon. Lady’s concerns to ensure that health and safety legislation is regarded and reasonably interpreted throughout work forces, whether in industry, agriculture or offices, and although such legislation is an important part of the modern workplace, it is unhelpful when health and safety becomes a byword for regulations that get in the way and stop businesses competing or, for instance, children from being taken on school trips once reasonable precautions have been put in place, and instead bring the whole system into disrepute. That is what the Government are trying to stop. The key defence of negligence ensures that if people breach health and safety rules or have not acted reasonably, that will—of course—be taken into account under the system, and the new clause will not change criminal health and safety procedures. We must, however, ensure that unreasonable claims, and the existing perception of health and safety legislation, do not get in the way of Britain’s ability to compete.

Stewart Hosie (Dundee East) (SNP): The Minister is pushing the point about perception. He is right: businesses do respond to perception, and sometimes go further than is legally required. However, if they respond to perception in one direction, they may well respond to a new perception in another direction and do less than is

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required. If that is the case, how many injuries or deaths will it take for the Minister to be back at the Dispatch Box rewinding some of the changes?

Matthew Hancock: If businesses behave unreasonably and are negligent, they will be caught by the system. That proves the point about why we have to strike a good balance between a health and safety system that everybody supports and under which employers—and others—have to behave reasonably and take reasonable precautions, and a system in which the test of having acted reasonably is not a defence in civil law. That is the change being made; it will help to free up business, and I commend the new clause to the House.

Mr Deputy Speaker (Mr Nigel Evans): I call the Minister [Interruption.] I meant the shadow Minister.

Mr Iain Wright (Hartlepool) (Lab): If only, Mr Deputy Speaker.

This is my first opportunity to congratulate the hon. Member for West Suffolk (Matthew Hancock) on his promotion. It is a pleasure to see him at the Dispatch Box, as he has been many times in his guise as Disraeli, Churchill, or perhaps Sir Robert Peel, and it is good to see him in his current incarnation.

In his opening remarks, the Minister mentioned that the new clause seeks to deal with perception. We should not, however, be legislating on the basis of perception, and as he spoke I became increasingly concerned that this is yet another example of an insensitive, out-of-touch Government who somehow deem all regulation as inherently bad, and health and safety legislation as all-encompassing, bureaucratic and often unnecessary.

2.15 pm

Julian Smith: Will the hon. Gentleman give way?

Mr Wright: I have missed the hon. Member for Skipton and Ripon (Julian Smith) over the course of the summer, and I remember with affection some of his interventions in Committee. I welcome him back; it is good to see him.

Julian Smith: I reciprocate the hon. Gentleman’s remarks. Does he agree with the Government that perception is important in health and safety legislation in almost the same way as in employment law? Does he claim that there is no issue with perception, and does he totally disagree with what the Government are trying to do?

Mr Wright: On perception, there is a feeling in the country—it is often fuelled by the media—that the so-called health and safety culture is inevitably a drag on economic growth and recovery. We must, however, set the context, and I want to make an important point to the Minister. The TUC estimates that every year at least 20,000 people die prematurely as a result of injuries, illnesses, or accidents caused by or in their place of work. That is far too many. The shocking figure from the Health and Safety Executive of 173 workers who were fatally injured at work often excludes a large number of other work-related deaths, but that figure

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alone means that 173 people went to work and did not come back, and that should not happen in a modern, compassionate society.

Alison Seabeck (Plymouth, Moor View) (Lab): Does my hon. Friend agree that improvements to the health and safety regime were out there for all to see during the construction of the Olympic site? There were no deaths and few injuries, which was because the health and safety regime had been properly applied.

Mr Wright: I agree with my hon. Friend. In the great and almost universal celebration of the London Olympics this summer, we should never forget that we saw the first Olympic stadium and village in the history of the games to be built without a single fatality. That is something to be proud of and was a result of the good partnership between Government—of all political persuasions—management and trade unions, together with workers, working to ensure that nobody was injured or killed while doing such important work.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op) rose

Guy Opperman rose

Andrew Bridgen (North West Leicestershire) (Con) rose

Mr Wright: I will give way to a fellow member of the Public Bill Committee, and then to a fellow north-eastern MP.

Andrew Bridgen: Not only did I serve on the Public Bill Committee for this important Bill, but I served on the Löfstedt review into health and safety reform, as did a representative from the Trades Union Congress, Sarah Veale. I assure the shadow Minister that there was absolute agreement among those on the Löfstedt review, including the TUC, that the perception of health and safety legislation—indeed, over-perception—is wrong in this country, and is holding back business and giving health and safety a bad name. The new clause goes some way in addressing that.

Mr Wright: I will go on to address the Löfstedt report in specific terms, and say where we agree with it and where we disagree, particularly with regard to the new clause, and if the hon. Gentleman will allow me, I will expand on that point. I am conscious that my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), a proud member of the Union of Construction, Allied Trades and Technicians, also wants to intervene, but I will first give way to the hon. Member for Hexham (Guy Opperman).

Guy Opperman: I am most grateful. All hon. Members will support the fact that the Olympics produced a death-free environment during the construction phase. However, changing laws on limited civil issues from strict liability to a balance of proof civil liability would not necessarily have affected or changed that. I hope that the hon. Gentleman will agree with and acknowledge that.

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Mr Wright: I understand where the hon. Gentleman is coming from. In his opening remarks, however, the Minister mentioned a degree of concern about perception. Health and safety is first and foremost an important means to achieve safety for the worker, but a safe and healthy work force and workplace can also be efficient and productive. I wish to expand on that point, but I will first give way to my hon. Friend.

Luciana Berger: My hon. Friend is generous in giving way, and I echo his welcome for the fact that there were no deaths during the construction of the Olympic site. However, there were 50 deaths in this country last year on construction sites, and as he said, 173 fatal injuries, which was only two fewer deaths than the previous year, which indicates that we have a long way to go; 173 families have been affected. The Minister spoke of perception, but I am concerned about the reality for the families of those who have tragically died at work.

Mr Wright: My hon. Friend is absolutely right. It is important that the House and the country has 28 April—workers memorial day—as a focus for remembering that people should not go to work and not come back, and that families should not be disrupted by death and injury at work. We need to pull together to ensure that health and safety is considered not as peripheral and a nice thing to have, but as central to our society and a productive economy.

Neil Carmichael (Stroud) (Con) rose

Mr Wright: If the hon. Gentleman will allow me, I will move on.

There are benefits to business from an effective and proportionate health and safety regime. As I mentioned, a safe and healthy work force can be a productive and effective work force. The Institution of Occupational Safety and Health estimates that, by having an effective health and safety regime, employers could save up to £7.8 billion, individuals could save up to £5.12 billion, and the economy, each and every year, could save up to £22.2 billion. It is important that health and safety is classed not as unnecessary and bureaucratic, but as conducive to good, effective and sustainable economic growth.

It is with those figures in mind that we should consider the merits of health and safety regulations and legislation, and the long-established premise of strict liability. As we know and as the Minister said, Professor Löfstedt reported in November last year. My right hon. Friend the Member for East Ham (Stephen Timms), who speaks for the Opposition on health and safety, welcomed many aspects of Löfstedt’s review. As my right hon. Friend said, most of it was positive, sensible and evidence-based, which is not a phrase we have heard often in deliberations on the Bill, and reinforced the view that health and safety is not a burden.

Over a number of years, the Health and Safety Executive has undertaken simplification exercises, which had support from both trade unions and employers. There are 46% fewer regulations than 35 years ago, and there has been a 57% reduction in the number of forms used. There is a perception that firms, and particularly small firms, spend disproportionate time on health and safety to the detriment of business and growth, but the average business spends

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20 hours and just over £350 a year on health and safety risk management and assessment, according to the Minister’s Department. Such activities therefore do not exactly take up a huge amount of businesses’ time.

Julian Smith: The shadow Minister might be about to say this, but does what he just said mean he will get on the side of the small business in Britain, as the Government are doing, and vote with them on new clause 14, or will he oppose it?

Mr Wright: The Labour party has always been on the side of small businesses, and Labour Members will continue to be so. In the 13 years of Labour government from 1997 to 2010, 1.2 million businesses were created, whereas 50 businesses each and every day are folding as a result of the current Government’s macro-economic polices and the double-dip recession. I shall therefore take no lessons from the hon. Gentleman.

Professor Löfstedt suggested that the UK needs a greater understanding of risk. We need to reject tabloid claims and the perception at the centre of the debate so far that health and safety legislation has somehow gone too far. He also recommends that education is provided to employers, workers and students on the dangers they face. However, the short section on strict liability in Professor Löfstedt’s report offers no argument or evidence for changing the current legislative arrangements, but rather an assumption that strict liability is unfair on employers. In fact, Löfstedt refers to three cases, but two were not strict liability cases, so would not be affected by the new clause. The assumption that the Government are guilty of making—they have been guilty of making many such assumptions on employment rights—is that the removal of that type of liability in some cases will boost the economy. That is economically illiterate, however, and not the solution that businesses, including small businesses, want to get us out of the double-dip recession that has been made in Downing street.

I mentioned the accusation of there being no evidence—we have heard that phrase time and again during the consideration of the Bill. There has been no consultation on the measure, which means that there could well be unintended consequences, because the Government have not sought the expertise of those who deal intimately with such issues. There has been no impact assessment on the measure, but can the Minister say why not? What are the expected costs and benefits of implementing the measure, which is supposed to liberate businesses to concentrate on economic growth? Does he have tangible, quantifiable, empirical evidence to support such claims?

Health and safety regulation has always contained a balance between different types of obligation—the majority are qualified by the phrase “reasonable practicability”, but some are strict. Although Professor Löfstedt had the insight that “reasonable practicability” has underpinned health and safety regulation, it has never been the key concept. A central point of the Opposition’s argument is that the balance has existed since the Factories Act 1937, which has been mentioned. In that three quarters of a century, the balance has been generally considered fair. Removing it risks taking us back to a 19th-century mill owner’s view of health and safety, which the Opposition could never support.

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If someone is injured because of a defect in a piece of equipment provided by their employer, the law is that it is no defence for the employer to say that they had a proper system of maintenance and inspection. Most people would think that right and fair, so it is unfortunate that the Government do not. They believe it is unfair for an employer to be the subject of civil action and pay compensation when they are not at fault, but what about fairness and justice for the injured worker? They are not at fault and did not ask to be injured. The new clause would remove the right to compensation for workers in those circumstances unless they can prove fault. The Government seek to place the burden on vulnerable employees, but the employer, and not the employee, selects and provides the work equipment. Regardless of fault, it is therefore the employer and not the employee who creates the risk. That is important.

Alison Seabeck: Prior to my previous question, I should have declared an indirect interest, which is already on record.

Given the emphasis placed on business concerns by Conservative Members, does my hon. Friend agree that it is slightly surprising that the Federation of Small Businesses briefing to MPs does not mention them? Perhaps that suggests that the line he is taking is the correct one.

Mr Wright: The FSB has been incredibly important throughout the consideration of the Bill, including on the green investment bank and ensuring that the supply chain can derive benefit from the potential in the new green economy, but it did not mention such concerns. The measure is not a priority for business and its absence is not a hindrance to economic growth. The balance, which has been well established for three quarters of a century, works well and will not hinder growth or recovery.

2.30 pm

I mentioned that it was the employer, not the employee, who creates the risk. Importantly, however, it is also the employer who can better distribute the cost that the risk creates. Indeed, the employee has no ability to distribute the costs at all. Removing strict liability does nothing to remove unfairness or to mitigate risk. All it does is move it elsewhere to the detriment of the vulnerable employee. There is an inevitable unfairness in that scenario that requires such a policy choice—between innocent employee and innocent employer—and there seems to be no compelling reason why the loss should fall on the employee.

Where there is no fault among the employer or employee, one sensible solution would be to allow employers to sue third parties—for instance, manufacturers or suppliers of potentially defective goods—because it would allow them to manage risk and effectively recoup compensation made to employees. What consideration has the Minister given to this sensible approach in an area that has been overlooked? I urge him not to pursue it by tampering with an approach to regulation that has served us well since the 1937 Act and certainly since the 1974 Act.

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This is yet another example of Ministers seeking to water down vital civil redress on the basis of anecdote, ideology and perception. Such a measure should not be in what the Government deem to be an enterprise Bill.

Mr Anderson: In Committee, mention was made of anecdote, a lack of evidence and perceptions, but we have to add a new one, which the Minister led with—impressions. We now have a Government run by impressions, but they are not very good at making impressions.

Mr Wright: The Minister is the Mike Yarwood of the House of Commons. It is nice to see a good, relevant, pertinent and timely reference to popular culture, from my own point of view.

The new clause will do nothing to enhance recovery and enterprise, and might have the unintended consequence of making the health and safety environment less safe and therefore less productive and efficient. I ask the Minister to think again, because this does nothing to aid the recovery that the country so badly needs.

Mr Anderson: The Minister started with his experience in the world of health and safety. My experience is based not only on my life as someone who worked for 20 years in the coal mining industry and then as a care worker but before that on the experience of my father, who worked the coal mines in the 1930s, when, in this country, one coal miner was killed every six hours on average. Think about that. One thousand men a year did not go home, in part because health and safety was a laughing matter and put to one side, because production was all. My father was twice buried alive—thankfully, he got out both times—and had a very close friend die in his arms, having had his head crushed between two mining coal tubs. It was not a satisfactory way to spend your life.

As a result of that history, the Government in 1947 nationalised the coal mines, set up a train of processes that included health and safety committees in the mining industry and joint consultative committees, and started planning for legislation that produced the Mines and Quarries Act 1954. That Act was actually put in place by a one-nation Tory Government, but they did it for the right reasons—to improve the conditions of people who were vital to the economic success of this country. As a result of that legislation and the improved techniques and machinery, the number of people dying in mines in the 1980s could be counted in single figures. The work force was depleted by about 70% between the 1930s and 1980s, but the number of health and safety measures fell from 1,000 to fewer than 10. For me, that history is vital to understanding how important health and safety issues are.

In 1989, I moved from the mines to become a care worker taking care of elderly people. Members might think that that is a completely different scenario, but let us think about it. The Minister gave the example of the bottle of bleach in the cupboard. It is important to know what is in cupboards to which people might well have access, particularly older people who might not have the capacity to understand what they are dealing with. That is why we introduced measures such as the Control of Substances Hazardous to Health Regulations 2002, which were about protecting people dealing with dangerous liquids.

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There were issues around the lifting and handling of people who were not mobile. The impact on care businesses was huge. People accepted, however, that if they wanted to do things properly and protect not only the workers but the people they were taking care of, they needed to introduce such measures. There were other issues around medication—how to supply it, how to make it safe, how to make sure it was not given to the wrong person, how to make sure that medication records were kept up to speed—that were all part and parcel of the health and safety measures that we should all be pleased are in place.

The discussions on the Bill have been marked, certainly in Committee, by a lack of real evidence. The man tasked by the Prime Minister with reviewing employment law, Adrian Beecroft, was questioned during the evidence-taking sessions, particularly by my hon. Friend the Member for Vale of Clwyd (Chris Ruane). In response to the question about what the empirical evidence and research was based on, Adrian Beecroft said:

“I accept the accusation that my views on whether the change would improve the efficiency of people working in businesses are based on conversations with a sample of people, which is not statistically valid.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 145, Q330.]

Justin Tomlinson (North Swindon) (Con): The hon. Gentleman is making some important points, but, regarding evidence, perhaps we could learn lessons from our European partners. For example, the nursery staff ratio in Germany is considerably less than here, which has driven down the costs while maintaining safety. So there is evidence, if we look further afield.

Mr Anderson: I am more than happy to follow that knowledge. If we want examples, let us look at Germany right across the board—at its employment legislation and practices, including on health and safety. It is a good example of an economy that is growing while having much tighter working rights and better regulation than this country does.

Mr Jim Cunningham (Coventry South) (Lab): I was interested in what the hon. Member for North Swindon (Justin Tomlinson) said about Germany, but he forgot one thing—after the war, it was a Labour Government who, along with their allies, set up the German industrial and other structures.

Mr Anderson: That is absolutely right. We took the best of what we had in this country, and thankfully the Germans picked it up. It would be a good idea if we looked at what they did and brought it here.

To repeat, Adrian Beecroft talked about

“conversations with a sample of people, which is not statistically valid.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 145, Q330.]

So there is no evidence base. It is a couple of guys talking in the pub, at a football match or out playing golf. It is two old guys sitting in deck chairs, saying, “Wouldn’t it be nice if we got rid of all this health and safety stuff and all these employment rights? Then everyone could make more money.”

Ian Lavery (Wansbeck) (Lab): Whether perception or reality, one thing we know for certain is that nearly 200 people were killed in the workplace last year and

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that in excess of 20,000 people were killed or died as a result of work. That is the evidence base. That is factually correct. There is little evidence other than that. Does my hon. Friend agree?

Mr Anderson: I could not agree more with my hon. Friend. He speaks from the history of the real world, not from just reading books and studying things at university. He has been in the real world and seen how people are affected when health and safety is allowed to go by the board. The words that were used continually in Committee were: “The perception is this”, “The impression is this.” It was based on anecdotes and assumptions. There was no evidence. If we create laws without evidence, we create nonsense.

In conclusion, I return to the word that I asked the Minister to define—“reasonableness”. In 20 or 30 years of negotiating contracts for people at work, that is one of the words I used to hate in any contract, because “reasonable” is made of elastic. It is a word used by lawyers and others to get around things. I will give hon. Members a real example. I used to represent home care workers, who went into people’s houses and took care of some of the most vulnerable people in this country. Their contracts included a range of duties, and included the words, “and other reasonable things”. There were questions: is it reasonable for a home care worker to bathe an old man or old woman? Is it reasonable for a home care worker to distribute medication to a man or woman? One would think, “Well, of course it is,” but if something went wrong, the employer would say, “You shouldn’t have been doing that. You’re not paid to do that. You shouldn’t have given that medication; you didn’t know whether they’d had it earlier in the day.” I am therefore concerned when the Minister says that the word “reasonable” can apply in that way, because it is a word that will be argued over and tossed around whenever there is a dispute.

Let me return to the point, which was mentioned earlier, that the Bill will create a “new impression”. It will create the impression that all bets are off—that employers do not have to care about health and safety, and that people can do what they want as long as they believe it is reasonable. It will not be reasonable when the statistics that my hon. Friend the Member for Wansbeck (Ian Lavery) spoke about earlier are not 200 people but 300 people a year killed in the workplace. Indeed, it will not be 20,000 people dying from injuries, but 30,000 people. We will come to regret this; it should be stopped at this stage.

Jim Sheridan: I rise to speak as chair of the all-party health and safety group. Unfortunately there are no active junior coalition partners on the group; hence the reason we have such a poor turnout from the junior coalition partners for this debate. I have no doubt that at the next election the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson)—who is in her place on the Front Bench—will be telling people in the west of Scotland that she stood up for workers. However, we will be reminding her of what her party has been doing for the workers.

The all-party group’s activities include producing reports. Just recently we published a report in conjunction with the TUC on asbestos in schools. I would encourage

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the Minister to get a copy of that report, which basically suggests that we have to challenge perceptions. Who would have thought that there was a health and safety issue in our schools? But there is. Some of our decaying schools are riddled with asbestos, and pupils, teachers, janitors and other people working in schools are being exposed to it. People do not see it, so they think there is not a problem, but there is in fact a major problem. Despite representations to the coalition Government to take action, they have so far refused to do so, which is unacceptable. Indeed, I am told that this place is being shut down for a number of years to deal with asbestos, so it is quite okay to clear the asbestos in this place, so that we can all live safely, but we cannot do it for our children in the schools. That for me tests the perception of this coalition Government when it comes to health and safety.

As I have said, in my earlier days when I worked in the shipyards in the west of Scotland in Glasgow, I remember seeing white flakes floating down and being told by the employer, “You’re just a trouble maker. There’s nothing wrong with them; it’s just rays of sunshine coming through.” I have to admit that we do not get many rays of sunshine in Glasgow, but on the days that we did, we could see those white flakes floating down. We raised concerns, but we were told that we were just being stroppy and obtrusive, when in fact we were talking about something that caused a real disease that people could not see. Since then I have attended far too many funerals of people who worked in the shipyards and had died a horrible death from mesothelioma. Indeed, even insurance companies are now refusing to pay out. Those poor people and their families who are chasing compensation are having to deal with unscrupulous insurance companies that even today are denying them the opportunity of compensation. I hope that those on the Government Benches will be able to tell their constituents who are suffering from asbestos-related disease that they are doing the right thing for future generations, because at the moment that is exactly what they are not doing.

Julie Elliott (Sunderland Central) (Lab): Does my hon. Friend accept that asbestos is not only a hazard in the workplace? I know of numerous cases where people who just used to give their dad a cuddle when he came home in his work clothes died some years later of mesothelioma or asbestosis. Indeed, we have not yet reached the peak incidence of such cases, because it takes so long before the disease manifests itself. Will the changes being proposed today not make the problem so much worse?

2.45 pm

Jim Sheridan: My hon. Friend is absolutely right. There is nothing more concerning for people who work with asbestos than to see their relatives catching such a serious disease as mesothelioma. Indeed, I know of one person who worked in a shipyard who had the displeasure of burying his daughter who had died from mesothelioma, simply because when he came home at night she used to sit on his knee. The dust was still there and she was swallowing it, but they did not see it and she was suffering. It was horrible to watch that father bury his daughter.

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Every week in this House the Prime Minister and the Leader of the Opposition pay tribute to our armed forces in conflicts throughout the world, and quite rightly so. However, when it comes to fatalities and near fatalities, there are more people killed or injured in the workplace than there are members of our armed forces affected in conflict areas around the world, yet we do not talk about them. Indeed, instead of talking about those people, we want to introduce legislation that will increase their number. When we talk about the armed forces and people losing their lives, please let us remember the workers who are losing their lives, of whom there will be more as a direct result of the Government’s legislation.

Julie Hilling: Does my hon. Friend agree that this debate is not just about those terrible deaths and injuries? It is also about the long-term conditions that people develop—for example, because their desk is crammed in a corner and they cannot sit at it properly, or because they get repetitive strain injuries. The Bill will make things worse for the conditions that give rise to such long-term problems. Ministers may say that the Bill will not affect deaths and injuries—we question that—but I am sure that my hon. Friend is convinced, as I am, that it will make things much worse for those long-term conditions.

Jim Sheridan: My hon. Friend is absolutely right. Indeed, there is a school of thought that says, “If you work in an office, there are no health and safety hazards,” but that is not true. Indeed, the reality is quite different.

We also have to consider the excessive burden put on the NHS as a result of accidents in the workplace. However, we are only talking about the accidents that are reported. We need to understand that more accidents happen in the workplace that go unreported, because the individuals do not want to report them in case they get the sack. We are therefore not getting the true figure for people injured in the workplace.

Ian Lavery: With regard to mesothelioma and asbestos-related diseases, at any one time we have roughly 9 million children in school, which is a huge concern. There are also about 800,000 to 900,000 teachers in schools where there is asbestos. Should we not be looking immediately for the full withdrawal of asbestos from schools? It has been done in other countries, by the way, Northern Ireland being one. Should we not be looking for a phased removal and, in the meantime, managing asbestos properly in schools to prevent people from dying? The problem is that such diseases have a latency period of between 30 and 40 years, so people do not report them. They do not develop diseases until 30 or 40 years later, and even then they are not sure where they have come from.

Mr Deputy Speaker (Mr Nigel Evans): Order. I did not want to interrupt the hon. Gentleman, who I know was making an important point, but I should just remind the House that this is not a general debate on health and safety; rather, we are talking about new clause 14.

Jim Sheridan: I appreciate that, Mr Deputy Speaker. I congratulate my hon. Friend the Member for Wansbeck (Ian Lavery), who is secretary to the all-party health

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and safety group. He is absolutely right about asbestos and schools. He has done an extensive job of work on that and the point he makes is absolutely right.

On the overall question of accidents or fatalities in the workplace, may I remind the Minister of the extensive amount of money that it will cost the NHS to treat people who have been injured at work through no fault of their own? It is a false economy to have unscrupulous employers putting their workers in danger and then for the NHS—that is, the taxpayer—to have to pick up the bill. That is completely wrong.

On the perception of employers, I worked for a number of years for an excellent and progressive employer, Thales, in the defence industry. It looked after its employees and had a health and safety director, and people reacted accordingly. If we treat people sensibly, we get a sensible response.

I recently asked my local chamber of commerce what problems it had in creating jobs and moving the economy forward, and what barriers were caused by the current health and safety situation. It told me clearly that it did not have a problem with health and safety legislation in the workplace, and that it wanted the Government to concentrate more on restarting the economy, creating jobs, getting money back into the economy and employing people. It said that the Government should focus on that, not on going back to the old Conservative days of saying that the trade unions are the enemy within and should be dealt with accordingly.

The Minister mentioned a bottle of bleach in a cupboard, but there are occasions when children are in offices or other places where there are bottles of bleach lying about, perhaps because of a lack of child care facilities. If those bottles are not clearly identified, there is every possibility that a child could lift one up and drink from it. I would not like to think of any child suffering as a result of that. The new clause is a complete diversion from where the country has been going. There is no appetite in the country for this type of waste of parliamentary time.

Mr Jim Cunningham: Does my hon. Friend agree that when the Conservative manifesto at the last election mentioned cutting red tape, as previous Conservative Governments have, it actually meant an attack on working people’s rights in the factories and coal mines?

Jim Sheridan: There is no doubt about that. We know the rationale behind it—it is just a backhanded attack on trade unions and health and safety representation in the workplace. I worked in the construction industry for many years, and there is clear evidence that where there is trade union organisation on construction sites, safety is considered paramount and the number of accidents is far lower than on non-organised sites.

I do not believe that there is any appetite for the new clause among either our constituents or our businesses, large or small. They want the coalition Government to focus on doing what they were elected to do—getting us through these difficult times, getting people back to work, getting our kids educated and rediscovering our health service. This self-indulgent new clause is not worth the paper it is written on, and there are far more important things to be discussed.

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Matthew Hancock: We have had impassioned contributions to the debate, not least from the hon. Members for Blaydon (Mr Anderson) and for Paisley and Renfrewshire North (Jim Sheridan). Several Opposition Members have made the point about a lack of consultation with the Opposition Front Benchers. However, the Löfstedt review involved a consultation, to which there were something like 400 submissions. That review published some of the evidence on which our proposal is based, not least evidence showing that most employers do not make a distinction between health and safety measures on a civil and a criminal basis. They are therefore more likely to waste time over-complying—the hon. Member for Paisley and Renfrewshire North mentioned the problem of time being wasted—than to focus on the need to ensure rigorous health and safety so that they can reduce the number of deaths and serious injuries in the workplace. That is what is valuable, and Opposition Members have spoken powerfully about it. That is where the focus should be, rather than on over-compliance with the details and technicalities that are often put in place, which are not required and not helpful for safety purposes. Instead, they give health and safety a bad name.

Mr Anderson: Is not the danger, though, that we will end up with under-compliance, which will lead to more people dying? I would rather waste time, as the Minister puts it, than waste lives.

Matthew Hancock: I assure the hon. Gentleman that if there is under-compliance, people will have been negligent and the full force of both the criminal and civil law will be available.

The hon. Member for Hartlepool (Mr Wright) mentioned the Federation of Small Businesses, but it has stated:

“A wider problem for small businesses is that many do not feel confident that they are compliant owing to confusion about what is absolutely necessary, and so feel the need to gold-plate the law to protect them.”

Indeed, an FSB survey showed that 87% of its members supported the Löfstedt approach. Given that figure, and given that the FSB is clear about the lack of confidence caused by the current confusion in the law, I hope he will accept that it is very much behind the Government’s approach.

Likewise, EEF, the manufacturers’ organisation, has stated:

“The current compensation system is serving the needs of neither employees nor employers and is the source of many of the media stories and public concern about excessive health and safety.”

That concern has been part of our debate. Of course, the substance of when technical breaches occur is a crucial part of the change that we are making, but I am glad that the hon. Gentleman acknowledged that there is also the problem of perception, which leads to over-complication. Both those problems need to be addressed, and they will be by our changes.

John Howell (Henley) (Con): I was moved, as I am sure everyone else in the House was, by the earnest statements that Opposition Members made about how members of their families and other people they knew had been killed by industrial diseases. However, difficulties such as those that we find in the current legislation do not help to prevent such cases.

16 Oct 2012 : Column 207

Matthew Hancock: Indeed, and over-compliance and the fear of technical breach bring the wider health and safety law into disrepute. All parties support that law. As has been acknowledged, it was introduced by a Conservative Government, and it has been vigorously supported by Labour Governments over the past century or so. However, it is undermined when the impression is given that the system is over-complicated, confusing and aimed at technical, rather than substantive, breaches.

Andrew Bridgen: I, too, was impressed with the genuine passion of Opposition Members who talked about health and safety, but I honestly believe that they missed one fundamental point. They seem to believe that there is no cost to over-compliance with regulations, but there is not only a cost to our economy and the Exchequer, which is important at the moment, but a cost borne by the long-term unemployed and the workless. They pay for over-compliance by not having access to the workplace, which vastly decreases their life expectancy. They are the people paying the price.

Matthew Hancock: My hon. Friend makes the point with great power that those who are out of work pay for an uncompetitive economy. They are the people whom we need to support.

Mr Iain Wright: If this is about costs and benefits, why is there not an impact assessment for the new clause?

Matthew Hancock: The benefits are set out clearly in Löfstedt. Most importantly, because it is necessarily difficult to ascertain the amount of over-compliance, Britain’s health and safety system will benefit from being able to compete and focus its resources on avoiding substantive breaches of health and safety law rather than on technicalities and over-compliance. All parties should focus on problems such as death in the workplace due to negligence. The hon. Member for Paisley and North Renewfreshire—[Laughter.] North Renewfershire—

Ian Lavery: If the proposals are passed by Parliament, does the Minister envisage a great reduction in the number of fatalities in the workplace next year?

3 pm

Matthew Hancock: I would expect the focus to be on the substantive breaches and negligence that, sadly, bring about the injuries and deaths in the workplace that we all want to minimise.

The hon. Member for Paisley and elsewhere mentioned the problems with asbestos in educational institutions, and especially in further education colleges. I want to give him the reassurance that past actions will not be affected by the changes in the law, should it be passed according to the will of Parliament. Now that the problems with asbestos are widely known and documented, I anticipate that people who ignore those problems will be ruled negligent by the courts, rather than such instances merely being considered technical breaches. I therefore do not see that question applying in such circumstances.

Jim Sheridan: For the benefit of Hansard, I should like to point out that my constituency is Paisley and Renfrewshire North. Concern has been expressed that

16 Oct 2012 : Column 208

this whole debate has been driven by B-list celebrities and B-list journalists on

The Daily Mail

who have probably never worked in such a workplace in their lives. Can the Minister name one company that has clearly told him that it will employ more people if the Bill goes through?

Matthew Hancock: As I have said, 87% of FSB members support the Löfstedt approach—[Hon. Members: “Name them!”] I am sure that if the hon. Gentleman asks the FSB, it will give him the names of some of those supporters. I prefer to be driven by evidence such as that survey, rather than by unnecessary concerns, given that precautions are being put in place through these amendments. The hon. Gentleman mentioned sunshine in Glasgow, and I hope that the new jobs and benefits to business that will result from the ability to remove the perception of a fear of health and safety will bring that sunshine not only to Glasgow but to the rest of the country. I hope that the new clause will reduce the effects of the perception of a need for over-compliance with health and safety measures, and that instead the focus can be placed on substantive breaches of health and safety regulations. I commend the new clause to the House.

Question put, That the clause be read a Second time.

The House divided:

Ayes 295, Noes 215.

Division No. 72]

[3.3 pm

AYES

Adams, Nigel

Afriyie, Adam

Aldous, Peter

Amess, Mr David

Andrew, Stuart

Arbuthnot, rh Mr James

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldry, Sir Tony

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Blunt, Mr Crispin

Boles, Nick

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brake, rh Tom

Bray, Angie

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, James

Brooke, Annette

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burley, Mr Aidan

Burns, Conor

Burns, rh Mr Simon

Burstow, rh Paul

Burt, Lorely

Byles, Dan

Cable, rh Vince

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Chishti, Rehman

Chope, Mr Christopher

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Cox, Mr Geoffrey

Crabb, Stephen

Crockart, Mike

Crouch, Tracey

Davies, David T. C.

(Monmouth)

Davies, Glyn

Davies, Philip

de Bois, Nick

Dinenage, Caroline

Djanogly, Mr Jonathan

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Drax, Richard

Duddridge, James

Duncan, rh Mr Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Evans, Graham

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Farron, Tim

Field, Mark

Fox, rh Dr Liam

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fuller, Richard

Gale, Sir Roger

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

George, Andrew

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Griffiths, Andrew

Gyimah, Mr Sam

Halfon, Robert

Hames, Duncan

Hammond, Stephen

Hancock, Matthew

Hands, Greg

Harrington, Richard

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, Mr John

Heald, Oliver

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollingbery, George

Hollobone, Mr Philip

Hopkins, Kris

Horwood, Martin

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Hunt, rh Mr Jeremy

Huppert, Dr Julian

Hurd, Mr Nick

Jackson, Mr Stewart

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kennedy, rh Mr Charles

Kirby, Simon

Knight, rh Mr Greg

Laing, Mrs Eleanor

Lansley, rh Mr Andrew

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Lefroy, Jeremy

Leigh, Mr Edward

Lewis, Brandon

Lewis, Dr Julian

Liddell-Grainger, Mr Ian

Lilley, rh Mr Peter

Lloyd, Stephen

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Luff, Peter

Lumley, Karen

Macleod, Mary

McCartney, Jason

McCartney, Karl

McCrea, Dr William

McIntosh, Miss Anne

McPartland, Stephen

McVey, Esther

Menzies, Mark

Mercer, Patrick

Metcalfe, Stephen

Mills, Nigel

Milton, Anne

Mitchell, rh Mr Andrew

Moore, rh Michael

Mordaunt, Penny

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Murrison, Dr Andrew

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Offord, Dr Matthew

Ollerenshaw, Eric

Opperman, Guy

Ottaway, Richard

Paice, rh Sir James

Parish, Neil

Patel, Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Pickles, rh Mr Eric

Pincher, Christopher

Prisk, Mr Mark

Pugh, John

Randall, rh Mr John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Reid, Mr Alan

Rifkind, rh Sir Malcolm

Robertson, rh Hugh

Robertson, Mr Laurence

Rogerson, Dan

Rosindell, Andrew

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Simmonds, Mark

Simpson, David

Skidmore, Chris

Smith, Miss Chloe

Smith, Henry

Smith, Julian

Soames, rh Nicholas

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stanley, rh Sir John

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, rh Andrew

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Syms, Mr Robert

Tapsell, rh Sir Peter

Teather, Sarah

Thurso, John

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Walter, Mr Robert

Ward, Mr David

Watkinson, Angela

Weatherley, Mike

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Willetts, rh Mr David

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Tellers for the Ayes:

Mark Hunter and

Mark Lancaster

NOES

Abbott, Ms Diane

Abrahams, Debbie

Ainsworth, rh Mr Bob

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Ashworth, Jonathan

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blears, rh Hazel

Blenkinsop, Tom

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Byrne, rh Mr Liam

Campbell, Mr Alan

Campbell, Mr Ronnie

Chapman, Jenny

Clarke, rh Mr Tom

Coaker, Vernon

Coffey, Ann

Cooper, Rosie

Corbyn, Jeremy

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Curran, Margaret

Dakin, Nic

Darling, rh Mr Alistair

David, Wayne

Davies, Geraint

De Piero, Gloria

Dobbin, Jim

Dobson, rh Frank

Docherty, Thomas

Donaldson, rh Mr Jeffrey M.

Donohoe, Mr Brian H.

Doran, Mr Frank

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Engel, Natascha

Esterson, Bill

Evans, Chris

Fitzpatrick, Jim

Flello, Robert

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Goggins, rh Paul

Goodman, Helen

Green, Kate

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hepburn, Mr Stephen

Hermon, Lady

Heyes, David

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hood, Mr Jim

Hosie, Stewart

Hunt, Tristram

Irranca-Davies, Huw

Jackson, Glenda

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kaufman, rh Sir Gerald

Keeley, Barbara

Khan, rh Sadiq

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewis, Mr Ivan

Lloyd, Tony

Llwyd, rh Mr Elfyn

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

MacNeil, Mr Angus Brendan

MacShane, rh Mr Denis

Mactaggart, Fiona

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Meacher, rh Mr Michael

Mearns, Ian

Miliband, rh David

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morrice, Graeme

(Livingston)

Morris, Grahame M.

(Easington)

Mudie, Mr George

Munn, Meg

Murphy, rh Mr Jim

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Perkins, Toby

Phillipson, Bridget

Pound, Stephen

Qureshi, Yasmin

Reed, Mr Jamie

Reeves, Rachel

Riordan, Mrs Linda

Ritchie, Ms Margaret

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Roy, Lindsay

Ruane, Chris

Ruddock, rh Dame Joan

Sarwar, Anas

Seabeck, Alison

Shannon, Jim

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Spellar, rh Mr John

Straw, rh Mr Jack

Stringer, Graham

Stuart, Ms Gisela

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Walley, Joan

Watts, Mr Dave

Weir, Mr Mike

Whiteford, Dr Eilidh

Whitehead, Dr Alan

Williams, Hywel

Williamson, Chris

Winnick, Mr David

Winterton, rh Ms Rosie

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Noes:

Heidi Alexander and

Phil Wilson

Question accordingly agreed to.

16 Oct 2012 : Column 209

16 Oct 2012 : Column 210

16 Oct 2012 : Column 211

16 Oct 2012 : Column 212

New clause 14 read a Second time, and added to the Bill.

New Clause 16

Adjudicators

‘(1) In Part 14 of the Insolvency Act 1986 (public administration (England and Wales)), before section 399 and the cross-heading which precedes it insert—

“Adjudicators

398A Appointment etc of adjudicators and assistants

‘(1) The Secretary of State may appoint persons to the office of adjudicator.

(2) A person appointed under subsection (1)—

(a) is to be paid out of money provided by Parliament such salary as the Secretary of State may direct,

(b) holds office on such other terms and conditions as the Secretary of State may direct, and

(c) may be removed from office by a direction of the Secretary of State.

(3) A person who is authorised to act as an official receiver may not be appointed under subsection (1).

(4) The Secretary of State may appoint officers of the Secretary of State’s department to assist adjudicators in the carrying out of their functions.”

(2) In Part 9 of that Act (bankruptcy), before Chapter 1 insert the Chapter set out in Schedule [Adjudicators: bankruptcy applications by debtors and bankruptcy orders] (adjudicators: bankruptcy applications by debtors and bankruptcy orders).

(3) Schedule [Adjudicators: minor and consequential amendments] (adjudicators: minor and consequential amendments) has effect.’.—(Jo Swinson.)

Brought up, and read the First time.

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson): I beg to move, That the clause be read a Second time.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to discuss the following:

Government new schedule 2—‘Adjudicators: bankruptcy applications by debtors and bankruptcy orders.

Government new schedule 3—‘Adjudicators: minor and consequential amendments.

Government amendments 37, 41 and 44

Jo Swinson: As well as moving the new clause, I shall speak to new schedules 2 and 3, along with Government amendments 37, 41 and 44, the latter of which are consequential amendments on territorial extent and commencement.

These amendments will reform the process by which an individual may apply for his or her own bankruptcy. They will remove the existing requirement for the indebted

16 Oct 2012 : Column 213

individual to present a bankruptcy petition to court and replace it with a new administrative process. Currently, a person with unmanageable levels of debt who wishes to make him or herself bankrupt must petition the court—the local court—for a bankruptcy order. There is no dispute that requires a court to make a judgment on competing interests in these scenarios. The vast majority of such applications—last year there were more than 30,000—are accepted by the courts with very little scrutiny.

The amending provisions mean that instead of petitioning the court, applicants would submit their bankruptcy application to a new adjudicator. This proposal was consulted on by the previous Administration and was broadly supported by interested parties. I should say that the Government consulted on removing the court from a wider range of cases, but as significant concerns were raised, this amendment concerns only debtors’ own petitions.

The adjudicator will hold a new statutory office, which we intend to be located in the Insolvency Service. The adjudicator will consider each application, and will decide on an objective basis whether the criteria for the making of a bankruptcy order have been met. If they have been met, the adjudicator will make the order. The administrative process is similar to the way in which individuals enter bankruptcy in Scotland, and in some other jurisdictions throughout the globe.

Applicants for bankruptcy will no longer need to attend court. Applications will be electronic, which will deliver significant savings, and applicants will be able to pay the fees in instalments. Bankruptcy will none the less remain a serious step. It may be the right solution for some debtors, as it allows debts to be written off and a fresh start to be made; but, quite rightly, those advantages are tempered by the serious implications of a bankruptcy order. Bankrupts are subject to restrictions, their assets can be sold for the benefit of creditors, and a portion of their incomes can be used to help repay their debts. For many, other debt remedies will continue to be more appropriate. We will therefore encourage debtors to take independent debt advice before making their bankruptcy applications. We will work with the Money Advice Service and providers in the debt advice sector to ensure that all debtors have the information that they need in order to make an informed decision.

There will be no change in the process that takes place after the making of a bankruptcy order. When an order is made by an adjudicator, the present post-bankruptcy order procedures will continue to operate, and the serious consequences that apply to an individual who is made bankrupt will remain.

Ian Murray (Edinburgh South) (Lab): It is good to reach the Bill’s report stage following a mammoth session in Committee before the summer recess, and it is interesting to note that the Opposition made such a strong and determined case in Committee that no Ministers from the Department for Business, Innovation and Skills are left on the Front Bench.

The new clause amends the Insolvency Act 1986 and introduces an administrative procedure for debtor petition bankruptcies. It is extremely worrying that the number of people who find themselves caught in a spiral of debt is increasing, and that many are forced to declare themselves bankrupt as a result. The figures are stark. Citizens Advice

16 Oct 2012 : Column 214

has dealt with more than 2.2 million problems involving debt, and has received 131,000 inquiries about bankruptcy and 142,000 about debt relief orders. The issue is not just about financing and debt; it is about relationships and, in some cases, lives. Bankruptcy is all too often a stigmatising experience, and evidence shows that that applies particularly to men.

Although the number of people declaring themselves bankrupt has fallen, the number of those becoming insolvent has risen sharply, according to official Government figures. As the Minister said, there were more than 30,000 personal insolvencies in just one quarter this year. That is a staggering figure, which shows how many households need help with debt problems. Insolvency is a very difficult condition to have to face, and it usually comes at the end of a long struggle to deal with debt and other money problems. The leading debt charity Clarifi, formerly known as the Consumer Credit Counselling Service, has said that it expects the number of personal insolvencies to increase over the next year, and has warned that more than 6 million households are still living on the edge. It is therefore vital for those who are struggling to pay their debts, or even just worried about their debts, to seek free advice and support. Opposition Members believe that it is hugely important for the process of insolvency to be as swift as possible, and we welcome the initiatives that will speed up that process.

As the Minister will know, key stakeholders have broadly welcomed the proposals, but they have raised several issues that I hope the Minister will deal with. First, there is the issue of the establishment of the location and how the new administrative process will deal with bankruptcy tourism. Secondly, there is the issue of the qualifications of adjudicators, which has prompted concerns similar to those relating to the Government’s proposals in respect of the role of legal officers in the employment tribunal system, and has been raised on a number of occasions. It is important for adjudicators to be in a position to make crucial judgments not just about bankruptcies, but about referrals to court. They need both knowledge of insolvency law and experience of the court system. Given that the Secretary of State has the power to appoint adjudicators, may I ask what experience-related criteria they will have to meet?

Thirdly, there is the issue of fees. People who are struggling with debt often cannot afford the £700 that it costs to go bankrupt, even when bankruptcy would otherwise be the best way out of their problems. That leaves them in a financial black hole. The number of people using debt relief orders, one of the cheaper remedies, has risen sharply again. It seems slightly perverse that someone who is struggling with debts should have to find more money in order to petition for bankruptcy.

The Bill empowers the Lord Chancellor to be flexible in fixing fees. Given that the new streamlined system has the potential to be electronic, and to be simpler and cheaper, I wonder whether the Government will consider some remedies for the problem of fees, such as allowing people who are seeking bankruptcy to pay in instalments.

The Minister mentioned advice for debtors. There is a view that taking the bankruptcy system out of the formal courts process and making it more administrative will reduce the gravity of the situation in which people find themselves. It is important for bankruptcy to be

16 Oct 2012 : Column 215

seen as a last resort, but all possible advice and guidance should be given to those who seek to go down that route.

Finally, may I press the Minister on one of her great loves, the Post Office? It has been said that the new administrative task of filling out the bankruptcy forms in the prescribed manner could be performed through the Post Office by means of a passport-style “check and send” arrangement. That would also allow the Post Office to divert people to other forms of debt advice, including free advice.

We support the change to a more administrative bankruptcy system because it is one of the critical remedies for debt, but we should be grateful if the Minister could provide some comfort on the issues that have been raised.

Mark Durkan (Foyle) (SDLP): Like my hon. Friend the Member for Edinburgh South (Ian Murray), I welcome the new clause and new schedules. On Second Reading, I asked the Government to look at the Insolvency Act 1986 in the context of the Bill, but they said at the time that they did not want do so. I am glad that they have now revised their view.

As my hon. Friend said, it is important for a number of issues to be tested, not least bankruptcy tourism. That is causing concern in both parts of Ireland at present, in key agencies and in terms of public opinion. I support the new clause and the extension of the Bill to amend the 1986 Act; however, I ask the Government to consider not just section 263, with which new clause 16 deals, but section 233. Changes could be made that would reduce the number of companies that go bankrupt.

Although these provisions are about making insolvency more straightforward and easing the process of bankruptcy, both as it is going on and afterwards, the amendments to section 233 being sought by R3—the Association of Business Recovery Professionals—would mean that businesses, which are currently subject to demands for ransom payments from suppliers once they go into administration, could instead be protected and brought into recovery rather than ransomed into bankruptcy. Essentially, the suggestion is that chapter 11-style protections could be brought into UK law. As it stands, the Insolvency Act is meant to protect companies in administration from having their supplies cut off, but utility supplies under that Act extend only to gas, electricity, water and telecommunications and not to IT and software, which are vital services for a modern business.

Justin Tomlinson: That is an extremely important point. First, utility companies can reset the tariff and choose the most expensive option, further adding to pressure on keeping the company viable. Secondly, we need to modernise the language, because IT contractors were not an option when the law was first introduced but are now essential to most businesses.

Mark Durkan: I thank the hon. Gentleman for that intervention and he has amplified the point that I am trying to make. In 1986, IT and software were not seen as vital for the conduct of a business but now, clearly, they are and the Bill must make good the deficit in the legislation. Also, as he said, the law as it stands forbids

16 Oct 2012 : Column 216

utility suppliers from ceasing to supply a company that has gone into administration although, of course, it does not prohibit them from charging a super-high tariff. That exposes companies in administration to ransom demands that can drive them towards bankruptcy. The Government are right to consider the Insolvency Act, but they must widen the scope of that attention beyond these very welcome amendments.

3.30 pm

Neil Parish (Tiverton and Honiton) (Con): I merely seek reassurance from the Minister. I can understand the need to simplify the bankruptcy procedure for those who, through no fault of their own, seek it because of their debts, and that is absolutely right. I am slightly concerned, however, that some companies shift money around and go bankrupt because it suits them to do so, taking other companies down with them. I want the Minister to reassure me that the adjudicator, or whatever he or she will be called, will have the powers to look into such cases so that it is not easy to go bankrupt when one should not. Such companies bring other good companies down with them.

Jo Swinson: I have appreciated the good but brief debate on this issue, on which there is clearly a degree of support on both sides of the House. That is always welcome and I particularly welcome the support for these measures from the hon. Member for Edinburgh South (Ian Murray) and the official Opposition.

I share the concern about the fact that too many people sadly need seriously to consider bankruptcy. We all know from our experience in our constituency surgeries the distress and heartbreak that can cause to the people who are contemplating such a measure. The impact of that decision on individuals is why it is absolutely right to do what we can to improve the process, to make it swift and efficient and, where possible, to prevent people from having to appear in court, which adds to the stigma that has been mentioned and is a distressing and difficult experience.

Bankruptcy should be considered as a last resort. A wide range of different measures are promoted and encouraged through people who give debt advice such as individual voluntary agreements, of which there are about 49,000 a year; debt management plans, of which 150,000 people take advantage each year; and the new debt relief orders for specific categories of very vulnerable and poor debtors, 29,000 of whom take them up every year. In that context, the 38,000 bankruptcy orders show that bankruptcy is not used by all the people who face such difficulties. Of course, the general advice to individuals in difficult financial circumstances is to seek advice early. The earlier the problems can be confronted, the more possible it is to avoid the worst consequences.

I am happy to address the specific issues raised by Members. The hon. Members for Edinburgh South and for Foyle (Mark Durkan) mentioned bankruptcy tourism, which is a practice whereby a debtor opts to access insolvency proceedings in a particular member state by relocating to that member state. That potentially enables them to seek a better outcome than might have been possible in their previous country. That is allowed for under the EU insolvency regulation provided that the relocation is genuine. For many individuals in such circumstances, the relocation might not be straightforward

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so it is perhaps unsurprising that the number of individuals from other EU countries who relocate to the UK for this purpose is very small. There is no evidence of widespread abuse, but the official receiver or a creditor can apply to court to annul the bankruptcy order if abuse takes place.

On the question about the adjudicator, the Insolvency Service is already looking at this for the debt relief orders that it administers and it will be able to do exactly the same in relation to the way in which adjudicators conduct their business.

On the qualifications of adjudicators, they will be making an objective decision by reference to prescribed criteria and there will be a right of appeal for an applicant if the adjudicator refuses to make an order. Obviously, they will need appropriate qualifications and experience to function effectively, and the Secretary of State will make sure that people appointed to that role are appropriately qualified. They will be based within the Insolvency Service which, as the House knows, is an executive agency of BIS, and will already have extensive experience of administering an electronic administrative process similar to the debt relief order regime. It is important to point out that adjudicators will not be able to be official receivers as well, as that would be deemed to be a conflict of interests so those roles will be kept separate.

I appreciate that for individuals seeking bankruptcy, the levying of fees on that is not straightforward. The administration fee will remain unchanged at £525, which is a significant sum for people in that situation. In the context of overall bankruptcy, where they will be expecting debt relief of at least £15,000, it is not as huge as could be imagined in the comparison.

What is important about the way in which the new system will operate is that it will take the courts away from a process in which they do not need to be involved. Where there is no dispute, where somebody wants to declare themselves bankrupt and nobody has a problem with that, there will be no requirement for that costly court process. That will generate significant savings so the application fee for the process is expected to be about £70, instead of the current court fee of £175. That will be helpful and of benefit to people applying for this option. It is estimated that overall debtors will save about £1.5 million. There is a saving for the Court Service as well, as this will be a more efficient process handled through the adjudicator, and individuals personally affected by bankruptcy will benefit. The suggestion from the hon. Member for Edinburgh South about paying in instalments is one that the Government have taken on board. It is part of the process and offers real advantages, compared with the current situation.

I was delighted that the hon. Gentleman mentioned the Post Office, which I, as the Minister responsible, am passionate about, as I know are Members in all parts of the House, who support their local community post offices. The Government are committed to ensuring that the Post Office can be an effective delivery mechanism for more front-office Government services. There is good news—last year, for the first time in a decade, the income stream that the Post Office received from Government services increased, so there is a positive story to tell.

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The Post Office is looking at a wide range of ways in which it can increase its services and its revenue. Playing a wider role in identity checks, as was mentioned, is one of those. It is important to bear in mind that the Post Office will bid for such contracts on the basis of being able to provide an effective and efficient mechanism for doing so. It is a very good organisation that is able to provide such services and win those contracts on the merits of the bid that it submits.

On the issues relating to advice, there are examples of more credit union facilities and a wider range of financial services being able to be accessed through post offices. Access to financial services from that excellent network of 12,000 branches is of particular help to people in communities that do not have a local bank branch, perhaps because they are very rural communities. Now that 95% of bank accounts are accessible at post offices, the recent announcement from HSBC was welcome. The hon. Gentleman certainly raises an important point.

On the points made by the hon. Member for Foyle and my hon. Friends the Members for North Swindon (Justin Tomlinson) and for Tiverton and Honiton (Neil Parish), it is important to point out that the amendments relate to personal insolvency, not company insolvency, and were I to detain the House on company insolvency, Mr Deputy Speaker may have concerns. I hear Members’ concerns and I know from Members’ correspondence that people are worried about the procedures when companies become insolvent. The change of termination clauses in insolvency would have implications for the suppliers, so many demands need to be balanced, but I recognise the concerns and we are looking more widely at issues facing companies in insolvency. My officials have been engaging with interested parties and stakeholders and will continue to do so.

I think I have dealt with the various points made by hon. Members, so I commend the new clause and the amendments to the House.

Question put and agreed to.

New clause 16 accordingly read a Second time, and added to the Bill.


New Schedule 2

‘Adjudicators: bankruptcy applications by debtors and bankruptcy orders

‘Adjudicators: bankruptcy applications by debtors and bankruptcy orders

“Chapter A1

Adjudicators: bankruptcy applications by debtors and bankruptcy orders

263H Bankruptcy applications to the adjudicator

(1) An individual may make an application to an adjudicator in accordance with this Chapter for a bankruptcy order to be made against him or her.

(2) An individual may make a bankruptcy application only on the ground that the individual is unable to pay his or her debts.

263I Debtors against whom an adjudicator may make a bankruptcy order

(1) An adjudicator has jurisdiction to determine a bankruptcy application only if—

(a) the centre of the debtor’s main interests is in England and Wales, or

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(b) the centre of the debtor’s main interests is not in a member state of the European Union which has adopted the EC Regulation, but the test in subsection (2) is met.

(2) The test is that—

(a) the debtor is domiciled in England and Wales, or

(b) at any time in the period of three years ending with the day on which the application is made to the adjudicator, the debtor—

(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or

(ii) has carried on business in England and Wales.

(3) The reference in subsection (2) to the debtor carrying on business includes—

(a) the carrying on of business by a firm or partnership of which the debtor is a member, and

(b) the carrying on of business by an agent or manager for the debtor or for such a firm or partnership.

(4) In this section, references to the centre of the debtor’s main interests have the same meaning as in Article 3 of the EC Regulation.

263J Conditions applying to bankruptcy application

(1) A bankruptcy application must include—

(a) such particulars of the debtor’s creditors, debts and other liabilities, and assets, as may be prescribed, and

(b) such other information as may be prescribed.

(2) A bankruptcy application is not to be regarded as having been made unless any fee or deposit required in connection with the application by an order under section 415 has been paid to such person, and within such period, as may be prescribed.

(3) A bankruptcy application may not be withdrawn.

(4) A debtor must notify the adjudicator if, at any time before a bankruptcy order is made against the debtor or the adjudicator refuses to make such an order—

(a) the debtor becomes able to pay his or her debts, or

(b) a bankruptcy petition has been presented to the court in relation to the debtor.

263K Determination of bankruptcy application

(1) After receiving a bankruptcy application, an adjudicator must determine whether the following requirements are met—

(a) the adjudicator had jurisdiction under section 263I to determine the application on the date the application was made,

(b) the debtor is unable to pay his or her debts at the date of the determination,

(c) no bankruptcy petition is pending in relation to the debtor at the date of the determination, and

(d) no bankruptcy order has been made in respect of any of the debts which are the subject of the application at the date of the determination.

(2) If the adjudicator is satisfied that each of the requirements in subsection (1) are met, the adjudicator must make a bankruptcy order against the debtor.

(3) If the adjudicator is not so satisfied, the adjudicator must refuse to make a bankruptcy order against the debtor.

(4) The adjudicator must make a bankruptcy order against the debtor or refuse to make such an order before the end of the prescribed period (“the determination period”).

263L Adjudicator’s requests for further information

(1) An adjudicator may at any time during the determination period request from the debtor information that the adjudicator considers necessary for the purpose of determining whether a bankruptcy order must be made.

(2) The adjudicator may specify a date before which information requested under subsection (1) must be provided; but that date must not be after the end of the determination period.

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(3) If the rules so prescribe, a request under subsection (1) may include a request for information to be given orally.

(4) The rules may make provision enabling or requiring an adjudicator to request information from persons of a prescribed description in prescribed circumstances.

263M Making of bankruptcy order

(1) This section applies where an adjudicator makes a bankruptcy order as a result of a bankruptcy application.

(2) The order must be made in the prescribed form.

(3) The adjudicator must—

(a) give a copy of the order to the debtor, and

(b) give notice of the order to persons of such description as may be prescribed.

263N Refusal to make a bankruptcy order: review and appeal etc.

(1) Where an adjudicator refuses to make a bankruptcy order on a bankruptcy application, the adjudicator must give notice to the debtor—

(a) giving the reasons for the refusal, and

(b) explaining the effect of subsections (2) to (5).

(2) If requested by the debtor before the end of the prescribed period, the adjudicator must review the information which was available to the adjudicator when the determination that resulted in the refusal was made.

(3) Following a review under subsection (2) the adjudicator must—

(a) confirm the refusal to make a bankruptcy order, or

(b) make a bankruptcy order against the debtor.

(4) Where the adjudicator confirms a refusal under subsection (3), the adjudicator must give notice to the debtor—

(a) giving the reasons for the confirmation, and

(b) explaining the effect of subsection (5).

(5) If the refusal is confirmed under subsection (3), the debtor may appeal against the refusal to the court before the end of the prescribed period.

263O False representations and omissions

(1) It is an offence knowingly or recklessly to make any false representation or omission in—

(a) making a bankruptcy application to an adjudicator, or

(b) providing any information to an adjudicator in connection with a bankruptcy application.

(2) It is an offence knowingly or recklessly to fail to notify an adjudicator of a matter in accordance with a requirement imposed by or under this Part.

(3) It is immaterial for the purposes of an offence under this section whether or not a bankruptcy order is made as a result of the application.

(4) It is not a defence in proceedings for an offence under this section that anything relied on, in whole or in part, as constituting the offence was done outside England and Wales.

(5) Proceedings for an offence under this section may only be instituted—

(a) by the Secretary of State, or

(b) by or with the consent of the Director of Public Prosecutions.” ’.—(Jo Swinson.)

Brought up, read the First and Second time, and added to the Bill.


New Schedule 3

‘Adjudicators: minor and consequential amendments

‘Adjudicators: minor and consequential amendments

1 The Insolvency Act 1986 is amended in accordance with this Schedule.

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2 In section 253 (application for interim order), omit subsection (5).3 In section 255 (cases in which interim order can be made), in subsection (1)(b) for “petition for his own bankruptcy” substitute “make a bankruptcy application”.

4 (1) Section 256A (debtor’s proposal and nominee’s report) is amended as follows.

(2) In subsection (1) omit the words from “unless” to the end.

(3) In subsection (3) for “petition for his own bankruptcy” substitute “make a bankruptcy application”.

5 For the heading to Chapter 1 of Part 9 substitute “The court: bankruptcy petitions and bankruptcy orders”.6 In section 264 (who may present a bankruptcy petition), in subsection (1) omit paragraph (b).7 For section 265 (conditions to be satisfied in respect of debtor) substitute—

“265 Creditor’s petition: debtors against whom the court may make a bankruptcy order

(1) A bankruptcy petition may be presented to the court under section 264(1)(a) only if—

(a) the centre of the debtor’s main interests is in England and Wales, or

(b) the centre of the debtor’s main interests is not in a member state of the European Union which has adopted the EC Regulation, but the test in subsection (2) is met.

(2) The test is that—

(a) the debtor is domiciled in England and Wales, or

(b) at any time in the period of three years ending with the day on which the petition is presented, the debtor—

(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or

(ii) has carried on business in England and Wales.

(3) The reference in subsection (2) to the debtor carrying on business includes—

(a) the carrying on of business by a firm or partnership of which the debtor is a member, and

(b) the carrying on of business by an agent or manager for the debtor or for such a firm or partnership.

(4) In this section, references to the centre of the debtor’s main interests have the same meaning as in Article 3 of the EC Regulation.”

8 In section 266 (bankruptcy petitions: other preliminary conditions), in subsection (4) omit “, (b)”.

9 (1) Sections 272 to 274A (and the cross-heading immediately preceding those sections) (debtor’s petition) are repealed.

(2) In consequence of the repeal of section 274A by paragraph (1), omit paragraph 3 of Schedule 20 to Tribunals Courts and Enforcement Act 2007 (debt relief Orders: consequential amendments).

10 For the cross-heading immediately before section 278 substitute—AChapter 1A

Commencement and duration of bankruptcy”.

11 In section 278 (commencement and continuance), in paragraph (b) (discharge of bankruptcy order) omit “the following provisions of”.12 In section 279 (duration of bankruptcy), in subsection (6) for “adjudged” substitute “made”.13 In section 282 (court’s power to annul bankruptcy order), in subsection (2)—

(a) omit “, (b)”,

(b) after “section 264(1)” insert “or on a bankruptcy application”, and

(c) in paragraph (a) after “pending” insert “or the application was ongoing”.

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14 In section 283 (definition of bankrupt’s estate), in subsection (5)(a) for “adjudged” substitute “made”.

15 (1) Section 284 (restrictions on dispositions of property) is amended as follows.

(2) In subsection (1) for “adjudged” substitute “made”.

(3) In subsection (3) for “presentation of the petition for the bankruptcy order” substitute “making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition”.

(4) In subsection (4), in paragraph (a) before “petition” insert “bankruptcy application had been made or (as the case may be) that the bankruptcy”.

16 (1) Section 285 (restriction on proceedings and remedies) is amended as follows.

(2) In subsection (1)—

(a) after “when” insert “proceedings on a bankruptcy application are ongoing or”, and

(b) for “adjudged” substitute “made”.

(3) In subsection (2) after “proof that” insert “a bankruptcy application has been made or”.

17 (1) Section 286 is amended as follows.

(2) Omit subsection (2).

(3) In subsection (8), for “adjudged” substitute “made”.

18 In section 288 (statement of affairs), in subsection (1) for “debtor’s petition” substitute “bankruptcy application”.19 In section 290 (public examination of bankrupt), in subsection (4)(a) for “adjudged” substitute “made”.

20 (1) Section 297 (appointment of trustee of bankrupt’s estate: special cases) is amended as follows.

(2) Omit subsection (4).

(3) In subsection (6) omit “(4) or”.

21 (1) Section 320 (court order vesting disclaimed property) is amended as follows.

(2) In subsection (2)(c) before “bankruptcy” insert “bankruptcy application was made or (as the case may be) the”.

(3) In subsection (3)(c) before “bankruptcy” insert “bankruptcy application was made or (as the case may be) the”.

22 In section 321 (orders under section 320 in respect of leaseholds), in subsection (1)(a) before “bankruptcy” insert “bankruptcy application was made or (as the case may be) the”.23 In section 323 (mutual credit and set-off), in subsection (3) before “a bankruptcy” insert “proceedings on a bankruptcy application relating to the bankrupt were ongoing or that”.24 In section 334 (stay of distribution in case of second bankruptcy), in subsection (2) before “presentation of the petition” insert “making of the application or (as the case may be) the”.

25 (1) Section 336 (rights of occupation etc of bankrupt’s spouse or civil partner) is amended as follows.

(2) In subsection (1) for “presentation of the petition for the bankruptcy order” substitute “making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition”.

(3) In subsection (2) for “adjudged” substitute “made”.

26 In section 337 (rights of occupation of bankrupt), in subsection (1)—

(a) in paragraph (a) for “adjudged” substitute “made”, and

(b) in paragraph (b) before “bankruptcy petition” insert “bankruptcy application was made or (as the case may be) the”.

27 In section 339 (transactions at an undervalue), in subsection (1) for “adjudged” substitute “made”.28 In section 340 (preferences), in subsection (1) for “adjudged” substitute “made”.

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29 In section 341 (meaning of “relevant time” under sections 339 and 340), in subsection (1)(a) for “presentation of the bankruptcy petition on which the individual is adjudged” substitute “making of the bankruptcy application as a result of which, or (as the case may be) the presentation of the bankruptcy petition on which, the individual is made”.

30 (1) Section 342 (orders under sections 339 and 340) is amended as follows.

(2) In subsection (1) for “adjudged” substitute “made”.

(3) In subsection (5)—

(a) for paragraph (a) substitute—

“(a) of the fact that the bankruptcy application as a result of which, or (as the case may be) the bankruptcy petition on which, the individual in question is made bankrupt has been made or presented; or”, and

(b) in paragraph (b) for “adjudged” substitute “made”.

31 In section 342A (recovery of excessive pension contributions), in subsection (1) for “adjudged” substitute “made”.32 In section 343 (extortionate credit transactions), in subsection (1) for “adjudged” substitute “made”.

33 (1) Section 344 (avoidance of general assignment of book debts) is amended as follows.

(2) In subsection (1) for “adjudged” substitute “made”.

(3) In subsection (2) before “presentation” insert “making of the bankruptcy application or (as the case may be) the”.

34 In section 345 (contracts to which bankrupt is a party), in subsection (1) for “adjudged” substitute “made”.

35 (1) Section 346 (enforcement procedures) is amended as follows.

(2) In subsections (1) and (2) for “adjudged” substitute “made”.

(3) In subsection (3)—

(a) in paragraph (b) before “bankruptcy” insert “bankruptcy application has been made or a”, and

(b) in paragraph (c) before “on that petition” insert “as a result of that application or”.

(4) In subsection (4)(a) after “while” insert “proceedings on a bankruptcy application are ongoing or (as the case may be)”.

36 (1) Section 347 (distress, etc) is amended as follows.

(2) In subsection (2)—

(a) after “individual to whom” insert “a bankruptcy application or”, and

(b) before “on that petition” insert “as a result of that application or”.

(3) In subsection (3) for “adjudged” substitute “made”.

37 In section 348 (apprenticeships, etc), in subsection (1)(a) for “petition on which the order was made” substitute “application for the order was made or (as the case may be) the petition for the order”.38 In section 350 (application of Chapter 6 of Part 9: bankruptcy offences), in subsection (1) after “applies” insert “—

(a) where an adjudicator has made a bankruptcy order as a result of a bankruptcy application, or

(b) ”.

39 (1) Section 351 (definitions for the purposes of Chapter 6 of Part 9) is amended as follows.

(2) In paragraph (b) before “presentation” insert “making of the bankruptcy application or (as the case may be) the”.

(3) Omit paragraph (c), and the preceding “and”.

40 (1) Section 354 (concealment of property) is amended as follows.

(2) In subsection (1)(c) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.

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(3) In subsection (3)(a) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.

41 (1) Section 355 (concealment of books and papers; falsification) is amended as follows.

(2) In subsection (2)(d) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.

(3) In subsection (3)(b) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.

42 In section 356 (false statements), in subsection (2)(c) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.43 In section 358 (absconding), in paragraph (b) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.

44 (1) Section 359 (fraudulent dealing with property obtained on credit) is amended as follows.

(2) In subsection (1) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.

(3) In subsection (2) before “petition” insert “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy”.

45 In section 360 (obtaining credit and engaging in business), in subsection (1)(b) for “adjudged” substitute “made”.

46 (1) Section 364 (power of arrest) is amended as follows.

(2) In subsection (1)(a) after “to whom a” insert “bankruptcy application or a”.

(3) In subsection (2) before “presentation” insert “making of the bankruptcy application or the”.

47 In section 376 (time limits), after “anything” insert “(including anything in relation to a bankruptcy application)”.

48 (1) Section 381 (definition of “bankrupt” and associated terminology) is amended as follows.

(2) In subsection (1) for “adjudged” (in both places where it occurs) substitute “made”.

(3) After subsection (1) insert—

“(1A) “Bankruptcy application” means an application to an adjudicator for a bankruptcy order.”

(4) In subsection (2) for “adjudging” substitute “making”.

49 In section 383 (definition of “creditor” etc.), in subsection (1)(b)—

(a) after “to whom a” insert “bankruptcy application or”, and

(b) after “that” insert “application or”.

50 In section 384 (definitions of “prescribed” and “the rules”), in subsection (1) omit “section 273;”.51 In section 385 (miscellaneous definitions), in subsection (1)—

(a) before the definition of “the court” insert—

““adjudicator” means a person appointed by the Secretary of State under section 398A;”,

(b) in the definition of “the debtor”, in paragraph (b)—

(i) before “bankruptcy petition” insert “bankruptcy application or a”, and

(ii) after “to whom the” insert “application or”,

(c) omit the definition of “debtor’s petition”, and

(d) before the definition of “dwelling house” insert—

“determination period” has the meaning given in section 263K(4);”.

52 In section 387 (meaning of “the relevant date”), in subsection (6)(a) after “after” insert “the making of the bankruptcy application or (as the case may be)”.53 In section 389A (authorisation of nominees and supervisors), in subsection (3)(a) for “adjudged” substitute “made”.

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54 In section 390 (persons not qualified to act as insolvency practitioners), in subsection (4)(a) for “adjudged” substitute “made”.55 In section 415 (fees orders), after subsection (1) insert—

“(1A) An order under subsection (1) may make different provision for different purposes, including by reference to the manner or form in which proceedings are commenced.”

56 In section 421A (insolvent estates: joint tenancies), in subsection (9) in the definition of “value lost to the estate”, for “adjudged” substitute “made”.57 In section 424 (who may apply for an order under section 423 in respect of transactions entered into at an undervalue), in subsection (1)(a) for “adjudged” substitute “made”.58 In Schedule 4ZA (conditions for making a debt relief order), for paragraph 3 substitute—3 A bankruptcy application under Part 9—

(a) has not been made before the determination date; or

(b) has been so made, but proceedings on the application have been finally disposed of before that date.”

59 (1) In Schedule 4A (bankruptcy restrictions orders), paragraph 2 is amended as follows.

(2) In sub-paragraph (2)—

(a) in paragraph (a), for the words from “petition” to the end substitute “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition and ending with the date of the application for the bankruptcy restrictions order”, and

(b) in paragraph (j), for “presentation of the petition” substitute “the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition”.

(3) In sub-paragraph (4) omit the definition of “before petition”.

60 In Schedule 6 (categories of preferential debts), in paragraph 14(1) for “adjudged” substitute “made”.