House of Commons Hansard Debates for 28 Nov 1990

Mr. Hurd : The United Nations Secretary-General has a role under the Security Council resolution, as the hon. Gentleman clearly knows. The Secretary-General was rebuffed when he tried to exercise that role. The diplomatic moves in these circumstances must be to reinforce in the Iraqis' minds the advantage for them of complying with the resolution by peaceful means.

Mr. Stuart Bell (Middlesbrough) : In a sense, the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) anticipated my question. Does the right hon. Gentleman accept that, of course, everyone in the House and outside it is opposed to war and to young people losing their lives? In relation to the visit to the United Nations tomorrow and the probable signing of the resolution, would it not be appropriate to see the United Nations Secretary -General, Mr. Perez de Cuellar? He began a peace initiative in August which was precipitous and was aborted. It might be appropriate for him now to return again to the middle east and to go to Baghdad to impress on Saddam Hussein

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the will and intention of the United Nations, so that Saddam Hussein has the opportunity to withdraw while there is still a period of grace and time?

Mr. Hurd : I discussed this aspect in September with the Secretary- General in New York and he felt that there was no point in his offering to go again if he were again rebuffed. The hon. Gentleman is right in saying that the Secretary-General has a role, as a servant of the United Nations, in trying to bring about implementation of Security Council resolutions.

Mr. Harry Barnes (Derbyshire, North-East) : During the Gulf debates, the Foreign Secretary was opposed to a resolution of the type that is going before the United Nations, on the ground that there was a possibility of its being vetoed. He did not answer the question about a possible veto by China, and I should like him to do so. If the resolution is carried, and as that would be a United Nations commitment, would it not be appropriate that forces in the middle east should be placed under a strict United Nations command structure and should not be operated at the behest of the Americans?

Mr. Hurd : On the first point, it would not have been sensible to go forward with a resolution that one thought would fail, but, as I said, that is not our information at present. On the second point, I do not think that that is likely to be workable in practice or, if there has to be a military option, that it would exercise that option in the most effective and life- saving way. I do not think that that will happen. I imagine that there will be a requirement that any member states that use the authority which the Security Council is about to confer on them should report the results to the Security Council.

Mr. John Cummings (Easington) : Does the Foreign Secretary agree that, if British blood is to be spilled in the Gulf, Her Majesty's Government ought to pursue a rigorous policy aimed at the total democratisation of all the Gulf states, which certainly do not have a fine record on human rights?

Mr. Hurd : I referred earlier this afternoon to the conference of Kuwaitis--including Opposition Kuwaitis--held recently in Ta'if. That conference agreed to return to the 1962 constitution in Kuwait. That is the kind of movement that I consider sensible and right for Kuwait.

Mr. Robert Litherland (Manchester, Central) : Does not the Foreign Secretary concede that to specify a deadline would automatically put this country on a war footing?

Mr. Hurd : No. It gives a period of grace--a peaceful pause--in which the peaceful pressures for a peaceful solution can reach their height. The expiry of the deadline--I have said this once or twice already, but it is very important--is not in itself a signal for military action to begin.

Mr. John McAllion (Dundee, East) : Does the Foreign Secretary accept that one of the most serious obstacles to the establishment of a new international order underpinned by the United Nations is the application of double standards by that body in the face of aggression? If

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aggression must be met with military force and a devastating war in Kuwait, why is it met with little more than polite protest in the Lebanon, west bank and Gaza?

Mr. Hurd : There is, of course, much more than polite protest. There are Security Council resolutions, because the situation is different : the background to the Israeli occupation of the west bank is entirely different. It is the result of several wars. The Security Council has taken a very clear line--the right line--the author of which was Lord Caradon. The Security Council has said that there must be a negotiation and a reconciliation of Israel's security, and of the rights of the Palestinians to self-determination.

It is not a question of a simple act of aggression which must be reversed, as it is in Kuwait. It is more complicated, and requires--and will be given by the Security Council a more complicated answer. We must search for that answer. Several of my replies this afternoon have concerned that point.

Mr. Ronnie Campbell (Blyth Valley) : Will the Foreign Secretary tell the House what efforts his Department has made, and will make, on behalf of the hostages who are still in Iraq? Is he going to secure their release and start a dialogue with Saddam to that end as countries such as Germany, Sweden, Italy and Spain have done--along with others too numerous to mention?

Mr. Hurd : Our argument--the argument that we have used with the Iraqis throughout--is that the policy of the human shield has no justification, that all our hostages should be released and that those still working in Iraq should be enabled to leave if possible. That is our policy, and we have never ceased to impress it on Iraqis. It is also the policy of the European Community as a whole since 28 October that there should not be negotiations--partial

negotiations--for the release of hostages : there should be no bargaining on that subject.

Mr. Andrew F. Bennett (Denton and Reddish) : Given that it took nearly 40 years to resolve the cold war, and given that there is no sign that sanctions are being breached, will the Foreign Secretary urge patience on the other countries before the United Nations resolution is passed and make it absolutely clear that it would be a far greater triumph for the United Nations--and far better for a new world order--if we achieved withdrawal from Kuwait by peaceful means, even it it took one, two, three or even four years, rather than through the loss of a large number of lives?

Mr. Hurd : Patience is certainly a virtue in relation to these matters, and it has been displayed. There has been no rush to arms--no rush to counter-attack Saddam Hussein. There has been a great deal of patience, which has not been rewarded with any progress.

We are not saying that patience has been exhausted on 28 November ; we simply want to point out to Saddam Hussein that there is a limit to the period in which he can spoil Kuwait, kill some Kuwaitis and torture others. There is a limit to the time in which peaceful pressures can be expected to be effective. That is what we are saying.

Mr. Alan W. Williams (Carmarthen) : How effective are the sanctions that are already in place against the export of oil from Iraq and Kuwait? Is it not true that those sanctions are completely effective and that exports of oil

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have ceased? Since Saddam Hussein invaded Kuwait to acquire those oil resources and as they have been sterilised, why embark on a path that could lead us to war? Would it not be wiser to give sanctions months or even a year or two to work rather than to prepare for war?

Mr. Hurd : Iraq is not shipping oil. I am not saying that the occasional truck carrying oil does not cross the border, but basically the hon. Gentleman is right. There is no large-scale shipment of oil out of Iraq and therefore Saddam Hussein is deprived of much the greatest part of his foreign exchange. He has quite substantial reserves not least because he stole a lot of money from Kuwait. Shortages are building up in Iraq as a result of sanctions, but, as I have just said, those shortages are not decisive. I do not believe that it is sensible or possible to rely indefinitely on that peaceful pressure to do what is necessary. I doubt whether that kind of peaceful pressure could be sustained indefinitely at its present level of intensity. The hon. Gentleman would have to face the risk of a gradual weakening of the will for collective security. There would then be a danger that at the end of that period the aggressor would sit back in possession of his aggression. It is not safe to contemplate that.

Mr. Tony Lloyd (Stretford) : What can the Foreign Secretary tell the House today that will give us any confidence to believe that if there are non-military means to resolve the dispute after the deadline those means will be allowed to continue?

Mr. Hurd : My right hon. Friend the Secretary of State for Defence and I and, I am sure, my right hon. Friend the Prime Minister will continue to do all we can to make the peaceful pressures effective. However, I have felt for a month or so--and perhaps for longer--that the most effective peaceful pressure is the clarity of the military option. The Security Council resolution will illustrate that clarity.

Mr. David Trimble (Upper Bann) : I agree with the Foreign Secretary that the case of Kuwait and that of the occupation of the west bank are not analogous. I believe that the attempt to link the two was started by Saddam Hussein as a diversionary tactic. Is there not a danger that that diversionary tactic may soon move from the realm of propaganda to an attempt to embroil Israel in this situation? Should we not take steps to guard against that and would those steps involve supporting the present Government of Jordan?

Mr. Hurd : The hon. Gentleman is right : that is one of the dangers. I am deeply concerned about the position of Jordan, which, for the time being, has lost its friendship with the Gulf states out of which came a lot of financial help. I believe that it is now largely implementing sanctions and as a result is in desperate economic trouble. We are doing our best within the Community and like the Germans and Japanese who have substantial resources and are not committed militarily in the Gulf, to bring help to Jordan.

Mr. Paul Flynn (Newport, West) : Will the Foreign Secretary announce today that he is redoubling his efforts to counter what is ultimately an even greater threat than Saddam Hussein, namely, the brisk international trade in armaments research and information? Is he aware that there are many firms in this country and agencies in the

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rest of Europe, in south America, the United States, China and throughout the world that are selling weapons and information on exotic conventional weapons such as fuel air explosives, laser battlefield weapons and nuclear, chemical and, the most terrifying of all, biological weapons? That trade will eventually threaten future Saddam Husseins and crises throughout the world unless the new world order can control it.

Mr. Hurd : Arms embargoes are in place with regard to Iran and Iraq. The hon. Gentleman knows how they have been enforced. With regard to his wider international point, there are various international conventions in place. When this situation is over, and even if Saddam Hussein were to withdraw peacefully from Kuwait, I agree that the existence and potential of those weapons would remain a major problem.

Several Hon. Members rose--

Mr. Speaker : I called three of the hon. Members who are now rising at Question Time-- [Interruption.] --but I shall call them again if they remain patient.

Mr. Bernie Grant (Tottenham) : Will the Foreign Secretary confirm that our troops are under the operational command of the Americans, which means that they could be dragged into a war without any reference to the right hon. Gentleman or to any other Minister?

The Secretary of State for Defence (Mr. Tom King) : They are not under such operational command.

Mr. Hurd : As my right hon. Friend the Secretary of State for Defence said, he has worked out detailed arrangements with the United States, but the position is not as the hon. Member for Tottenham (Mr. Grant) has described it. In any case, there is no question of our forces being committed to military operations without the consent of Her Majesty's Government.

Ms. Dawn Primarolo (Bristol, South) : I feel horrified about the way in which we are being dragged towards the inevitability of war and that the world community, with all its resources, cannot find ways to make Saddam Hussein get out of Kuwait without war. I am disappointed that the five permanent members of the Security Council now believe that war is necessary. Will the Foreign Secretary explain how the date in the resolution is not the date, upon which war will commence if Saddam Hussein has not withdrawn, because if Saddam Hussein ignores that date, inevitably we will be at war?

Mr. Hurd : The hon. Lady has mistaken the point. The date in the resolution--whether it is 1 January or 15 January--will not be the date on which military action will begin. It is the date from which member states will be authorised--not instructed, but authorised--to take such action which, I repeat, is in pursuit not of their own objectives but of the specific objectives that the Security Council has laid down.

Mr. Ron Brown (Edinburgh, Leith) : I remind the Foreign Secretary and the House that the tabloid press in this country have a motto--"Make it simple ; make it juicy ; make it up." May I assure the Government that I was never hounded or imprisoned and that I have never been a prisoner of the Iraqis, although certain newspapers, such as the Daily Record, have suggested that that might be the case? Nevertheless, there are prisoners out there

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from our own British community and they expect a lot more from a new revitalised British Government who, I hope, will have new ideas. One of those ideas must be to negotiate on and to discuss this problem. We may speak about linkage, and we may speak about Israel, but the one thing that we must speak about is the lives of those 1, 400 British people out there, because they are important. The whole world knows that not only those lives but many other lives are at stake. Indeed, the whole world is at stake. What is the Foreign Secretary going to do about that? Will he approach the Iraqis in some way, even unofficially, because they will approach him?

Mr. Hurd : If we had followed most of the advice that we had received from the Britons trapped in Kuwait, we would have started military action a long time ago.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : Does the Foreign Secretary accept that, although we fully endorse his position that diplomatic recognition does not in any way give support, the parents and relatives of those who died at Lockerbie will want to be assured that Her Majesty's Government have genuine assurances from the Syrians that they will no longer support or in any way encourage terrorist action that emanates from their shores?

Mr. Hurd : The hon. Lady has raised a perfectly fair point. Obviously I cannot say anything about the progress of the inquiry into Lockerbie, although I have taken that point into account. The hon. Lady will know the position that the Americans have taken on it also.

Mr. Tam Dalyell (Linlithgow) : On a point of order, Mr. Speaker.

Mr. Speaker : I shall take the presentation of Bill first.

BILL PRESENTED

Road Traffic

Mr. Secretary Parkinson, supported by Mr. Secretary Waddington, Mr. Secretary Rifkind, Mr. Secretary Patten, Mr. Secretary Hunt, Mr. Secretary Waldegrave, Mr. Norman Lamont and Mr. Christopher Chope, presented a Bill to amend the law about road traffic ; And the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed. [Bill 17.]

WELSH AFFAIRS

Ordered,

That the Matter of Education and Training in Wales, being a Matter relating exclusively to Wales, be referred to the Welsh Grant Committee for its consideration.-- [Mr. Chapman.]

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Points of Order

4.34 pm

Mr. Tam Dalyell (Linlithgow) : On a point of order, Mr. Speaker. May I congratulate you on allowing questions on the statement to run for so long? I was fortunate enough to be called early. Along with other hon. Members, I congratulate you on allowing questions to run for so long on this important subject so that the Foreign Secretary could patiently answer our questions.

But there is a problem, and it is on that problem that I seek advice. The Gulf crisis is possibly the most important since 1945. You will have detected from the nature of the questioning that passionate beliefs are held by hon. Members other than those on the two Front Benches. Will you reflect on your powers of discretion? I am speaking off the top of my head, but I understand that a long time ago Mr. Speaker Gully, in the days when Sir Steven Runciman's father was a Cabinet Minister, was able to take certain decisions on controversial issues of the day to allow proper arguments to be deployed by Back-Bench Members.

My question to you, Mr. Speaker, is this. Do you believe that you have special powers of discretion to enable the many hon. Members--I hesitate to give a figure, but perhaps 30, 40, 50 or more--who hold views which may be substantially different from those voiced from the Front Bench to put their case? What are the powers of Mr. Speaker on that?

Mr. David Winnick (Walsall, North) : Further to that point of order, Mr. Speaker. My hon. Friend referred to passionately held views and you had an illustration of them during the exchanges. You will be aware that I, like many of my hon. Friends, disagree with my hon. Friend the Member for Linlithgow (Mr. Dalyell). Time and time again in the history of Parliament, one of the outlets for passionately held views was a debate. Although I recognise that it is not up to you to decide--unless at some stage you grant an application under Standing Order No. 20--it would be unfortunate if parliamentary business was arranged without providing an opportunity for the House to have not merely exchanges such as we have just witnessed but a debate. Presumably the business of the House is being arranged right up to Christmas. Then we shall have the recess. I hold a view different from that of many hon. Members and I would defend and justify it if I were so fortunate as to catch your eye in any debate. I believe that a debate would be useful.

Mr. Speaker : I fully understand that a statement is no substitute for a debate. I have that very much in mind in thanking the hon. Member for Linlithgow (Mr. Dalyell) for what he said. This is an important matter which is of interest to the whole of Britain and to the wider world. That is why I let questions run today.

However, I must always have regard to the subsequent business before the House. I was able to do that today. With regard to a debate, we have business questions tomorrow when we may hear that there is to be a debate on this matter. I fully understand the anxieties that hon. Members on both sides of the argument expressed.

Mr. Andrew F. Bennett (Denton and Reddish) : On a point of order, Mr. Speaker. You will be aware that there is a time-honoured tradition in the House that the only

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way in which seats can be reserved is by placing prayer cards. You will also be aware that, according to another tradition, the first seat below the Gangway is always reserved for former Prime Ministers. As we now have two former Prime Ministers, would you perhaps suggest to the right hon. Member for Finchley (Mrs. Thatcher) that she might take up the seat on the second row back so that she can keep an eye on both the Prime Minister and the right hon. Member for Old Bexley and Sidcup (Mr. Heath)?

Mr. Speaker : That was a good try. I can say with my hand on my heart that that is not a matter for me.

Mr. Stuart Bell (Middlesbrough) : Further to that point of order, Mr. Speaker. I would not wish the House or those who read our proceedings to be misled. There is absolutely no tradition on this side of the House of placing prayer cards. That goes back to the end of the last century when the first Labour Members of Parliament came from the north. They found that prayer cards had been placed by their honourable colleagues from the south and removed them. From that time to this, Labour Members have removed prayer cards.

Mr. Speaker : The House knows that there is a convention on the matter. We should now get on.

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Orders of the Day

Statutory Sick Pay Bill

Considered in Committee.

Clause 1

Reduction in the amounts recoverable by employers who have paid statutory sick pay

4.39 pm

Mr. Archie Kirkwood (Roxburgh and Berwickshire) : I beg to move amendment No. 1, in page 1, line 11, leave out from payments' to and' in line 15, and insert

after the words "prescribed circumstances", there shall be inserted the words "and in the circumstances in paragraph (aa) below.".'

The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd) : With this it will be convenient to discuss the following amendments : No. 2, in page 1, line 15, after payments,' insert--

(aa) there shall be added, after paragraph (a), the following provision :

"(aa) entitling, except in prescribed circumstances, any employer employing twenty or more persons, who has made one or more payments of statutory sickpay in a prescribed period to recover an amount equal to 80 per cent. of the aggregate of these payments." ;'. No. 3, in page 1, line 21, leave out from made' to the end of line 23 and insert

there shall be added at the end, the words, "or, where applicable, the amounts which they are entitled to recover by virtue of paragraph (aa) above.".'.

No. 4, in page 1, line 26, leave out 1(a)' and insert 1(aa)'.

Mr. Kirkwood : I know that some of the arguments about the Bill were rehearsed on Second Reading, but I cannot understand why it is necessary to complete the Bill with such speed. Second Reading took place on Monday, when, unfortunately, I was unable to attend, but my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) spoke. Why is it necessary for the Bill to be considered in Committee today?

The speed with which we are proceeding with the Bill has caused some suspicion, to put it mildly, among those who will be directly affected by it. They believe that the Government's undue haste is suspicious. The Minister furrows his brow at that, but the story behind the argument goes back before my time to 1982 when the old sickness benefit was changed into the statutory sick pay scheme. I am told that those changes led to hard- fought arguments that continued for many months. Although small businesses, the Confederation of British Industry and other interested parties were not entirely happy with the final result, they felt that their arguments had been heeded and that they had had a fair crack of the whip.

I do not believe that the current consultation has been satisfactory in terms of the changes that were first brought to the attention of the House in the uprating statement made a few weeks ago. I do not use unmeasured language often, but it is deplorable and a matter for the House if the Government proceed with the Bill--admittedly it is small and technical, but the changes are far-reaching--at such speed. There are only 15 Bills in the Queen's Speech, and

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I cannot understand why we should proceed with such haste. Since we are discussing the first group of amendments I hope that it will be in order for the Minister to say something about that. It would be helpful if he could reassure those interested parties that there was no untoward reason for such indecent haste.

I know that hon. Members have urgent business to attend to in other parts of the House and I accept that the Bill is small and technical, but it is disappointing that more of our colleagues are not present to consider the issues. The statutory sick pay scheme, however, in common with other parts of the social security system, is now so complex that it takes experts to work out the implications of any changes for small businesses, employers and employees. Surely that is another reason for moving slowly on the Bill. It is important to remember that the Bill will have far-reaching effects for businesses and employees.

The Second Reading debate made it clear that the function of the Bill is to reduce the statutory sick pay rebates from the current level of 100 per cent. to 80 per cent., which is a big jump in one go. It will also remove the additional rebate for national insurance contributions that are paid on statutory sick pay, and it gives the Government the power to cut the rebate again without primary legislation. The Bill also increases the threshold for the higher level of statutory sick pay from £125 to £185, but that higher level will not be uprated, but frozen at £52.50.

The net effect of the changes will be to put a disproportionate burden on those businesses with a much higher incidence of sickness. That is bad news for small businesses, which will see them as the thin end of the wedge.

4.45 pm

In the uprating statement, the Secretary of State spoke about a new partnership between the Government and employers, but in reality it is a new partnership between the treasury and the Department of Social Security. The Treasury required cuts to be made and the Department has found a mechanism for offloading those cuts and their impact on to employers' shoulders.

An important principle that is buried in the Bill should not go unnoticed. If employers are to be directly responsible for the provision of sick benefits in the future, it should not happen piecemeal. If the Government are intent upon that, they should say so openly, so that we can discuss it properly. The withdrawal of redundancy rebates is an obvious example of what can happen by default. I hope that that change is not part of a trend.

The amendments are designed to exclude from the Bill firms that employ fewer than 20 people ; after all, the proposed changes will have a far greater impact on small businesses than on larger ones. There are precedents in employment law for distinguishing among companies based on their size. That principle should be accepted as there are compelling reasons for questioning whether the full-blown provisions of the Bill should be visited on small businesses that employ fewer than 20 people.

The general economic climate faced by small businesses is much harsher than that faced by larger businesses. That factor should also be taken into account.

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Mr. Tony Banks (Newham, North-West) : I am sorry to interrupt the hon. Gentleman, but I hope that he will bear with me, as I am new to this. The hon. Gentleman referred to businesses with fewer than 20 employees, but amendment No. 2 speaks of

"any employer employing twenty or more persons".

I assume that either a mistake has been made or I am missing something-- probably the latter--so perhaps the hon. Gentleman can enlighten me.

Mr. Kirkwood : I asked the same question this morning. My hon. Friend the Member for Orkney and Shetland (Mr. Wallace) is a distinguished advocate at the Scottish Bar and has chosen to draft the amendments so that the Bill's provisions affect those who employ more than 20 people. Therefore, by implication, they exclude smaller firms with fewer than 20 employees. However, the question of the hon. Member for Newham, North-West (Mr. Banks) was perfectly fair. Do not ask me what motivates advocates. If I had had more time, I think that I could have drafted the amendments more simply--that sounds like a direct and vicious attack on my hon. Friend the Member for Orkney and Shetland, and I withdraw it. The Minister is such a generous soul and I know him so well, that I am certain that he would not let the legislation founder on such petty technicalities. Having said that, it was a perfectly proper question to ask. As I said, I asked the same question this morning ; I am glad that I did because otherwise I could have been completely floored by the hon. Gentleman's intervention.

There is a case for considering the special circumstances in the economic climate. The uniform business rate provisions, changes in business rates and interest rates, and the administrative impact of VAT have all had a disproportionately hard effect on smaller businesses. Some of the research undertaken by the Government on the provision, extent and incidence of occupational sick pay schemes is flawed. Will the Minister say something about that? I know that a study was produced which is now in the Library, but it is vigorously contested by the organisations representing small businesses. They believe that the research was selective and produced results that do not reflect reality. I make no comment on that, but merely put the question to the Minister. Had there been proper consultation in advance of the Bill's introduction, we might have been able to deal with such issues.

People who run and work in small businesses have told me repeatedly that they were given a clear undertaking that additional costs would not be visited on them any more than they were under the scheme introduced in 1982. That is as valid now as it was then. I know that that point was made at some length on Second Reading, but I repeat it because it is of particular relevance to small businesses which employ fewer than 20 people.

About 96 per cent. of United Kingdom businesses employ fewer than 20 people. Such businesses simply cannot afford statutory or other occupational sick pay schemes. It is not economically feasible for them to do so. The figures that I have been given show that the cost can be anything up to £11 a week, and can run for 28 weeks under the Bill's provisions. If such costs were visited on a one or two-person business, it could face difficulties.

If one or two of the people involved in a one or two-person business are sick for 28 weeks, they cannot reclaim national insurance contributions because they are

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not paying any contributions to recover. What are the people in business at that sort of level expected to do in the context of the new provisions? It is all very well if one is running a major company with professionals to advise on such matters, or if one's national insurance contribution of £1,000 or £2,000 is billed each week so that one can deduct and divvy up and, in the fulness of time, everything works out in the wash. The arguments are fairly suspect even at that level, but when applied to businesses that are self-owned or have a sole proprietor, the Bill's provisions have some frightening consequences.

The Parliamentary Under-Secretary of State for Social Security, the hon. Member for Norfolk, South-West (Mrs. Shephard), provided a useful answer to a parliamentary question tabled by the hon. Member for Coventry, South-East (Mr. Nellist) on 24 January. The question involved the number of changes in the statutory sick pay scheme and its administration since its introduction --there have been 19. I shall not detain the Committee by reading out the list, but they are all of some significance. That is all very well for someone who works in the accounts department of ICI because he or she can cope with it very well--I do not complain about that. But it must have been difficult to keep up with that pace of change since March 1985. I concede that the changes included uprating of statutory sick pay rates, so we can subtract five from the total of 19, but that still leaves a significant number of changes for a small business confronting the Bill's provisions. I see that the ministerial brow is again furrowed.

The changes will have major effects on employers, particularly those in small businesses. They will encourage the small number of businesses which perhaps do not play to the rules as they should and are guilty of malpractice, to opt out. That will have a direct adverse impact on the employees of the small firms. I read the debate on Second Reading carefully and it contained well-rehearsed arguments about the Bill's impact--which will be big enough--on part-timers, women and disabled employees. However, it will have a particularly great impact on people in smaller firms. The employees in such firms are totally reliant on statutory sick pay and the Bill will have serious consequences for them.

This is an important debate and I could go on at great length, but I do not want to repeat points made on Second Reading. This is one of the most crucial amendments and unless I receive some fairly convincing answers, I reserve the right to invite the House to divide on it. I shall be grateful if I have some support. It is often a lonely furrow to plough in the modern Liberal Democrat party and I am grateful for support from wherever it comes. If I may be facetious, the three Conservative Members present should look carefully at the Bill's impact because the Conservative party often beats its chest about what it has achieved for small businesses. To use fighting talk, if they are not careful, the Government will get beaten in the jaw at the next election, and will not be easily forgiven. They must be cautious if they want to introduce such a measure with impunity. I say that with some passion, because the argument has been put to me with great force.

I shall encapsulate my argument by giving a quote from Mr. Ian Handford, the employment affairs chairman of the National Federation of Self Employed and Small Businesses. I know that the briefing was probably sent to other Members. It states :

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"The Government is shifting the welfare state onto the backs of the business community. Small businesses just cannot take on board state benefits out of their present meagre profits."

The sting is in the document's tail, which states :

"If only 10 per cent. of all businesses take evasive action to defend themselves from this attack then there will be a loss of some 350,000 jobs."

Rather than take on the additional hassle of the financial and administrative burden of the Bill, companies may simply divest themselves of employees. If that happens it will be a tragedy, not just for the employees and the firms, but for the British economy. Those are the stakes involved in the group of amendments. I hope that the Minister will seriously consider the arguments put to him before he decides to rule out the amendment.

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