Prime Minister David Cameron today said that his new year’s resolution was to “kill off the health and safety culture for good”.
Health and safety legislation has become an “albatross around the neck of British businesses”, costing them billions of pounds a year and leaving entrepreneurs in fear of speculative claims, he said.
He announced plans to cap the amount which can be earned by lawyers from small-value personal injury claims against employers and to reduce overall costs in cases funded by “no-win no-fee” deals.
And he revealed he has asked the Health and Safety Executive to bring forward to the end of 2012 its timetable for abolishing or consolidating up to half of all existing regulations.
Speaking to an audience of small businesses in Maidenhead, Berkshire, the PM warned that 2012 was going to be a “difficult year” but insisted the Government would not simply “stand back”.
“It’s a year when the Government’s going to roll up its sleeves and ask, ‘what can we do to help business, to help consumers, to help our economy get moving and to help our economy provide jobs for young people?’,” he said.
The Government is “waging war against the excessive health and safety culture that has become an albatross around the neck of British businesses”, said the PM.
He added: “This coalition has a clear new year’s resolution: to kill off the health and safety culture for good.
“I want 2012 to go down in history not just as Olympics year or Diamond Jubilee year, but the year we get a lot of this pointless time-wasting out of the British economy and British life once and for all.”
Moves to tackle the compensation culture form part of a general assault on red tape following the 2010 Young Report and last year’s Lofstedt Report into how to minimise the burden of regulation.
“I don’t think there’s any one single way you can cut back the health and safety monster,” said Mr Cameron.
“You’ve got to look at the quantity of rules – and we’re cutting them back; you’ve got to look at the way they’re enforced – and we are making sure that is more reasonable; we’re taking self-employed people out of whole classes of health and safety regulation.
“But the key about health and safety is not just the rules, the laws and regulations – it’s also the culture of fear many businesses have about health and safety.”
His comments were branded “appalling and unhelpful” by Richard Jones, head of policy and public affairs at the Institution of Occupational Safety and Health.
“Labelling workplace health and safety as a monster is appalling and unhelpful, as the reason our legislative system exists is to prevent death, injury or illness at work, protecting livelihoods in the process,” said Mr Jones.
“The problem identified by the Government’s own reviews is not the law, but rather, exaggerated fear of being sued, fed by aggressive marketing.”
An existing fixed-costs scheme in England and Wales limits lawyers’ fees from personal injury claims worth under £10,000 resulting from road traffic accidents. This is expected to be extended to cover cases under £25,000 and to include claims against employers.
The current scheme caps legal costs at a fixed amount dependent on the number of stages needed to settle the case. For example, if a defendant admits liability, the winning claimant’s lawyer can charge no more than £400 to handle the case.
This is intended to provide both sides with certainty about how much the case will cost and stop defendants being bullied into settling for fear of spiralling legal fees.
Mr Cameron also indicated that he will be writing to chief executives of major insurance companies, inviting them to a 10 Downing Street summit in February to ensure that the levels of compliance they demand from businesses do not go beyond what is required by the law.
And he announced that bids will be invited next month for a contract to manage a £1 billion Government-funded Business Finance Partnership to give companies access to loans.
Following the controversy over Derby rail firm Bombardier’s failure to secure a major Thameslink contract – which went to German firm Siemens – Mr Cameronsaid that the Government needs to do more to support British businesses.
“It sometimes seems like, even though we have these rules about procurement, the French and German governments seem to be better at sourcing from their own suppliers than we are,” he said.
“If it comes to big contracts – and what happened with Bombardier and the railway business – we need to see Government as a better customer, talking to its suppliers, telling them what’s coming down the track, helping them to plan.
“That doesn’t mean we are breaking any rules about the single market or procurement, we are just behaving like a business with its key suppliers. I think we should do that.”
Writing in the Evening Standard, Mr Cameron said that the health and safety culture “saps personal responsibility and drains enterprise”.
“Building our economy up to strength requires a real pioneering, risk-taking spirit – and today we are smothering it in bubble wrap and red tape,” he warned. “This must stop.”
He added: “Speak to business people and they’ll tell you the real problem isn’t so much the rules themselves but the way they are interpreted. A culture of fear is leading people to take the most absurd precautions. Businesses see other firms being sued for unavoidable accidents and think they’ve got to cover their backs.”
A cap on legal fees for personal injury cases would “deter the speculative health and safety chancers and those who leech off good businesses”, he said.
Action is already under way to change the “strict liability” law which makes businesses responsible for anything that goes wrong at work, said Mr Cameron.
“Too often they are held responsible even if they have done everything they can to prevent an accident. That will now change too,” he promised.
Mr Cameron added: “Killing off the health and safety nonsense for good is not something government can do alone. It needs a change in the national mindset.
“We need to realise, collectively, that we cannot eliminate risk and that some accidents are inevitable. We need to take responsibility for our actions and rely on common sense rather than procedure.
“Above all, we need to give British businesses the freedom and discretion they need to grow, create jobs and drive our economy forward.”
TUC general secretary Brendan Barber said: “This shows just how out of touch with the reality of working life Number 10 is.
“Every government report on the UK’s supposed compensation culture has shown it to be a myth, and in fact claims have been declining over the past decade. Despite this, the Government seems hell-bent on trying to stop workers injured by their employers’ negligence being able to claim compensation.
“Workers will be astonished by the claim that there is an ‘excessive health and safety culture that has become an albatross around the neck of British businesses. The truth is that there are two million people in the UK who have an illness or injury caused by their work – the vast majority of which could have been prevented had their employer taken the correct safety precautions.
“Nor do businesses ‘battle against a tide of risk assessment forms every year’. The vast majority of employers never carry out any kind of written risk assessments, and for those that do, there is easy-to-understand advice available from the Health and Safety Executive on how to do them.
“It is clear that Downing Street does not have a clue about what life is like for the millions of ordinary people who work in shops, offices, schools, factories, call centres and other workplaces across the UK. Instead it is making policy in response to grumbles from elements of the small business lobby and the risible rantings of right-wing commentators.”
Otto Thoresen, director general of the Association of British Insurers, said: “The Government is to be commended for grasping the need to tackle our compensation culture.
“We are pleased that the Government will be extending the cap on the amount lawyers can earn from small-value personal injury claims.
“We have long campaigned for reforms to halt the compensation bandwagon to reduce frivolous claims and excessive legal costs. This is essential in reducing the cost of motor insurance.
“Insurers have a key role to play in helping firms manage health and safety. We have produced guidance for firms that dispels any myths around onerous insurance requirements so that they can manage their risks in a sensible and proportionate way, without the constant fear of being sued. We welcome the opportunity to meet with the Government to discuss this important issue.”
A spokesman for insurers Aviva said: “Aviva welcomes any measures to ease compensation culture and the health and safety burden faced by businesses across the UK.
“Compensation culture remains one of the main threats insurers face to offering affordable cover; we have been working with the Government on this issue for many years, and fully agree that more work needs to be done to bring the root causes of compensation culture under control.”
Steve Radley, director of policy at manufacturers’ organisation EEF, said: “This is a welcome recognition by the Prime Minister of the need to tackle the excessive compensation culture which has grown up around health and safety in the UK.
“This has led to too many false claims which are a burden on companies and undermine its importance as a business issue.
“However, in tackling one aspect of healthy and safety we must not confuse a compensation culture with the overall health and safety culture, which is a different issue altogether.
“The Lofstedt Review clearly indicated that the UK’s health and safety system is fit for purpose and that the problems lie with the interpretation of legislation by some parts of the insurance industry, not the legislation itself.”
The president of the Association of Personal Injury Lawyers, David Bott, said: “Although we are yet to see the detail of this latest announcement, we have grave concerns that the Government is pushing through too many swathing changes to the system at once without proper consideration as to the implications for injured people.
“The danger is that workers could be exposed to an unnecessary risk of injury and then be left with a civil justice system which cuts them off from their right to full and fair redress.
“Instead of watering down the rules which are designed to protect workers, businesses should be made to feel confident in the knowledge they have nothing to fear from litigation provided they take reasonable steps to prevent needless injury. Any fear businesses have should be for the welfare of their staff, not legal costs.
“We are always keen to help find efficiencies in the system which do not prevent injured people from bringing genuine claims. But it is far too early to consider extending the new streamlined process for lower-value road traffic accident cases as it still has teething problems and remains far from being the finished article.”
