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Last Updated: Tuesday, 17 May, 2005, 12:20 GMT 13:20 UK
Queen's speech targets business
The Queen
Businesses will be asked their views on red tape this year
Measures aimed at slashing corporate red tape and making firms accountable for fatal accidents at work have been unveiled in the Queen's speech.

The government believes outdated regulations are hampering competition.

Now businesses will be consulted before a reform bill to tackle excessive red tape is put forward next year.

Meanwhile, a new offence of corporate manslaughter will be created to target "gross failings" by management which have directly led to fatalities.

By allowing courts to look at a wider range of management conduct, the bill will make it easier to prosecute companies in the aftermath of fatal accidents.

New offence

Under current regulations, liability depends on proving the misconduct of one person at the top of a company rather than collective liability.

It is not possible to add up the negligence of several individuals to show the company as grossly negligent. A specific individual has to be identified as a controlling mind for corporate manslaughter to be proven.

KEY BUSINESS BILLS
Corporate Manslaughter Bill
Company Law Bill
Regulatory Reform Bill
Consumer Credit Bill
CrossRail Bill
Pensions Bill (draft)
Regulation of Financial Services Bill

There have been a number of accidents, in the transport sector and in the workplace, which have provoked demands for the use of the law of manslaughter.

P&O European Ferries and two directors were acquitted of the manslaughter of 192 people who died when the Herald of Free Enterprise sank off the coast of Zeebrugge in May 1987.

The trial collapsed in its early stages when the judge ruled there was insufficient evidence against any director or senior manager.

Uninsurable?

Rail crash victims, in particular, have been pressing the government to fulfil its 1997 commitment to introduce a corporate manslaughter offence.

The Paddington train crash in 1999, in which 31 people died, was among the tragedies which fuelled further calls for this new legislation.

Forklift driver in a warehouse
Companies, rather than individuals, will face manslaughter charges

Critics of the bill points out that over-regulation will make more hazardous businesses such as demolition uninsurable and, as a result, costs will greatly increase.

They also claim the UK has one of the best safety records in the world but also has one of the poorest rehabilitation rates.

Time, energy and resources would be better spent improving the rehabilitation of those hurt and producing better "no fault" compensation schemes, the bill's critics add.

'Lukewarm'

Business has shown a mixed response to the measures announced in the speech.

"This Queen's speech will get a lukewarm reaction from business at a time when the economic climate remains worrying," said the British Chambers of Commerce (BCC).

The malignant spread of red tape and regulation must be addressed as a matter of the utmost urgency
Forum of Private Business

"Our businesses need flexibility not more burdens. We need to promote enterprise and growth, not restrict our firms as they compete in the global market."

The government said it aimed to promote a long-term investment culture, and make it easier to set up and run a company under the Company Law Bill which has been held over from the last parliamentary session.

"Company Law reform is long overdue," said the Federation of Small Businesses.

"Current law does not reflect the reality that many limited companies are small businesses with limited turnover and a handful of employees.

"The bill will go some way towards addressing this."

'Damaging regulation'

A separate reform bill - the Regulatory Reform Bill - will ensure that unnecessary red tape is slashed, with the aim of cutting the backlog of what the CBI has called "damaging regulation" that is holding business and enterprise back.

"The malignant spread of red tape and regulation must be addressed as a matter of the utmost urgency," said a spokesman for the Forum of Private Business (FPB).

The Hampton Report published earlier this year recommended the merging of several private sector regulators.

The report suggested streamlining the number of regulatory bodies from 35 to about nine.

Additionally, a bill will be reintroduced to grant necessary powers to build the CrossRail east-west London rail link. The previous bill ran out of time in the last session of parliament.

The government says is still exploring how to fund the link, but has said that taxpayers should not have to foot the entire bill.




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