David Cameron: Health and safety laws are holding back business

5th January 2012

Last year, in my party conference speech, I said the Coalition would do whatever it takes to help British businesses take on the world. Earlier this week, in my New Year's message, I said this must be the time our country really goes for it - that we've got to be bold about building a new economy and getting our country back to strength.

What does that mean? It means doing everything possible to take the brakes off business: cutting taxes; slashing red tape; putting billions into big infrastructure projects; making it much easier for British firms to get out there and trade with the world.

And there is something else we are doing: waging war against the excessive health and safety culture that has become an albatross around the neck of British businesses.

Talk of health and safety can too often sound farcical or marginal. People think of children being given goggles to play conkers, or trainee hairdressers being banned from using scissors. But for British businesses - especially the smaller ones that are so vital to the future of our economy - this is a massively important issue.

Every day they battle against a tide of risk assessment forms and face the fear of being sued for massive sums.

The financial cost of this culture runs into the billions each year. Harder to calculate is the cost in terms of attitude: the way it 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. This must stop.

So one of the Coalition's New Year resolutions is this: 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 banished a lot of this pointless time-wasting from the economy and British life once and for all.

To achieve this we've got to be clear what the problem is. Successive governments have been too quick to create new regulations instead of trusting people to use their common sense. That is why, over the past 18 months, we have been going through existing red tape with a forensic eye on what absolutely has to stay and what can go.

Lord Young and Professor Ragnar Löfstedt - both experts in this field - have reported back on how we can bring some sense back to health and safety. As a result, we're making some big changes: businesses will no longer have to report minor accidents; up to a million self-employed workers will be exempted from health and safety regulation completely; a new panel will give firms the right to challenge controversial inspection decisions; and from this month, the Health and Safety Executive begins the task of abolishing or consolidating up to half of existing regulations.

I have also asked that the timetable be accelerated, so most of our changes to Britain's health and safety regime will be completed this year.

This change across Whitehall is vital, but we will be making a huge mistake if we think we can stop there. 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. The chain of blame-recrimination-compensation is spiralling out of control. It's with this culture that the problem lies - so we're acting on two fronts.

First, by addressing the fear of being sued. It is simply much too easy for no- win-no-fee lawyers to encourage trivial claims against businesses, which end up settling out of court because it's too expensive to fight the case. It's a huge part of our compensation culture and it must change.

That's why today we are announcing that we will extend the current scheme that caps the amount that can be recovered in small-value personal injury claims. We're going back to a proper distinction between what is really hazardous and what is not - and we're going to get a grip on the cost of cases. It just makes no sense to have a claim for £500 coming with a £5,000 legal bill - but it happens. Our plans will deter the speculative health and safety chancers and those who leech off good businesses, and we're not going to waste any time in making this happen.

On top of this, we'll change the health and safety law so that businesses are no longer automatically at fault if something goes wrong. Too often they are held responsible even if they have done everything they can to prevent an accident. That will now change too.

Second, we will investigate the demands made by insurance companies. Of course it is in their interests to guard against reckless practices, but there is a risk that the dial can swing from sensible to insane levels of compliance, forcing businesses to go far beyond what is required by the letter of the law.

The Association of British Insurers has recognised this and produced new guidance for businesses on what they have the right to expect from their insurer, but we need to see real and rapid change on the ground. So we will be writing to the chief executives of all the major insurance companies asking them to set out what they will do to deal with this problem - and I will be inviting them to join me at Downing Street next month to set out their plans.

These are the concrete changes we are making. But 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.

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