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money resolution for Northern Ireland. Indeed, it is specifically excluded from the arrangements that we are discussing by the exclusion in clause 4(4).When the Minister replies, I hope that he can advise me on the arrangement in Northern Ireland, because those expenses will obviously arise. I presume that they will have to be met by money provided by Parliament, but not under the current arrangements and certainly not by the Bill. Why does no money resolution cover Ireland? Where is the alternative provision? We are then entitled to ask why we need a money resolution for mainland Britain.
I hope that those are reasonably understandable points. They have raised logical and interlinking questions in my mind. As I do not wish unnecessarily to prolong the debate, I am happy to leave it at that point and listen, in a minute or two, to the explanation which the Minister of State will provide.
11.12 pm
Mr. Archy Kirkwood (Roxburgh and Berwickshire) : I should like to follow the excellent example set by the hon. Member for Glasgow, Garscadden (Mr. Dewar) by raising just one or two questions that reinforce some of the pertinent questions that he raised. I cannot, for the life of me, understand why we are in this position. There may have been a breakdown in the negotiations between the two major parties through the usual channels, to which I am not a party. I freely offer myself as a bona fide go-between. Being a nice, natural, trustworthy character, I might be able to sort out the problem and everybody might get home for Christmas in better order. I am pleased to see that the Leader of the House is present. The hon. Member for Garscadden started by making one or two perfectly pertinent procedural points, with potential precedents attached to them. If the Government start willy nilly, without real justification, interfering with the clear understanding that money resolutions follow Second Readings, they will encourage other people to adopt the same tactics in the future. That is not in the best interests of the House. The Minister of State owes us an explanation about why the Government have seen fit to introduce this money resolution before the Bill's Second Reading.
I know that, in general, money resolutions have fallen into desuetude in terms of the real purpose for which they were originally intended, with the honourable exception of the hon. Member for Bradford, South (Mr. Cryer) and one or two others who specialise in the important task. I pay tribute to them because huge sums of money are voted through in money resolutions--not on this Bill, perhaps, but certainly on others.
The House should pay proper attention to money resolutions and the debates on them are of much better quality if they follow Second Reading. For all I know, different hon. Members will be in the Chamber for Second Reading. It is a worrying sign if the usual rules and established precedents and traditions of the House are discarded without valid reason. Of course, I have read in the press of the procedural differences between the two major parties. I cannot understand why the money resolution has been tabled now.
I want to refer to the merits of the money resolution. It is a restricted motion because clause 4(3) of the Bill states :
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"There shall be paid out of money provided by Parliament any expenses incurred by a Minister of the Crown in consequence of this Act."That is a very restricted statement on which to base a money resolution.
The hon. Member for Garscadden was right to press the Minister on his explanation for introducing the money resolution today. As I understood the Minister, he said that the only additional expenses that would be incurred would be in the Government's role as an employer. The right hon. Gentleman must give us a little more to go on than that. I listened carefully to the hon. Member for Garscadden and it appears that all that clause 1 does is abolish a right. Mr. Scott rose --
Mr. Kirkwood : I am about to be enlightened.
Mr. Scott : All that we a week. Tonight, we are limited to discussing the money resolution. The hon. Gentleman is at risk of going beyond the scope of that.
Mr. Kirkwood : I am prepared to take guidance on procedure from the Chair, but I am not prepared to take it from the Treasury Bench. I shall repeat my question because I think that it is a valid money resolution question--on what is the money to be spent? Clause 1 simply abolishes a right and entitlement under the Social Security Contributions and Benefits Act 1992. How on earth can that incur administrative expenses? I just do not understand. There may be something hidden in the depths of clause 2, which is an enabling clause. The House should consider carefully giving Ministers power to table regulations on such matters.
Although it may be a matter for substantive debate on Second Reading, the Minister knows that those who speak on behalf of small businesses are unhappy about this sort of legislation. If the Minister is saying that clause 2(1) gives Ministers the power to introduce the sort of changes relating to a new small businesses scheme that we have been hearing about in Budget speeches and so on, it is disgraceful that that should be done by secondary legislation under clause 2(1).
Even if it is true that the Government are introducing a new administrative scheme for small businesses, together with all the other changes that we have heard about in Budget speeches, how on earth will that cost extra money? As the hon. Member for Garscadden said, it should cost less because it saves money--and amen to that. Had the hon. Member for Havant (Mr. Willetts) seen fit to stay for the Minister's reply to the debate, he might have raised a reasonable question about whether it is right or wrong to save money. Like others, I am in favour of saving money.
The Minister's explanation did not persuade me that he has a case for tabling the money resolution today. I object to the enabling powers in clause 2 if the intention is to introduce substantial changes such as those to which I referred. It is not even clear to me whether the resolutions that would be brought forward by way of regulation, which might cost money, would be by the negative or the affirmative procedure. The Minister would do the House a service if he gave the answer.
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I am not sure that the money resolution is necessary in any case. Ministers have the ability under national insurance fund and other social security powers to introduce such expenditure without an additional money resolution. No case for one has been made. Will the additional funding come through departmental expenditure? Will it show up in departmental estimates? Where will right hon. and hon. Members find the increased expenditure that the money resolution presages? It is not clear to me why there are any increases in the first place.There is no proper justification for this measure. The people who will be affected by the Statutory Sick Pay Bill are afraid of part of its content, and the Minister has not come close to persuading me that the money resolution is proper, appropriate or necessary. 11.20 pm
Mr. Bob Cryer (Bradford, South) : The usual procedure for money resolutions has been observed ; the Minister moved the resolution as perfunctorily as he possibly could. The House will not let him get away with that tonight, because the resolution is linked with a Bill that, under a resolution yet to be tabled, will be dealt with in some three hours from start to finish--or six hours from start to finish, including the guillotine resolution.
Mr. Deputy Speaker (Mr. Michael Morris) : Order. That does not have much to do with administrative expenses, does it?
Mr. Deputy Speaker : Not in my judgment.
Mr. Cryer : One problem is that the Deputy Speaker's judgment is always accepted as superior--and I accept it as such. I was merely pointing out that the 45 minutes allocated to a money resolution is usually ignored, but it is being used on this occasion because of the limited time that will be allowed to debate the Bill on the Floor of the House and because the House feels that it is being robbed. Those 45 minutes should be made use of on every occasion. It is important to obtain an explanation from the Minister in this instance, because there will be little opportunity to obtain one otherwise. The money resolution allows the Minister to be reimbursed "for the purposes of any Act resulting from the Statutory Sick Pay Bill".
We know that the Bill will abolish the reimbursement of 80 per cent. of sick pay to a number of employers but not all. To compensate, national insurance contributions will be reduced.
The Bill's explanatory and financial memorandum states that the saving in annual public expenditure will be
"about £695 million in 1994-95, rising to £720 million in 1995-96 and £750 million in 1996-97."
Do those figures include or exclude the £100 million cost to Government revenue through the reduction in national insurance contributions? If they are reduced, there will be a loss of revenue. Is that part of the authority that the Minister thinks is required by the money resolution?
The resolution covers "any Act", but the delegated legislation is not on the face of the Bill. We know that the Minister will bring forward delegated legislation because on 1 December, the Secretary of State for Social Security stated :
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"So far, we have been helping employers whose national insurance bill was £16,000 or less a year. I am raising that limit to £20,000."That means that the numbers of small firms, as defined by the national insurance contributions, will be widened. The Secretary of State went on to say :
"So far, we have been reimbursing 100 per cent. of statutory sick pay for absences of longer than six weeks. I shall start giving 100 per cent. help after four weeks. That will help an extra 50,000 employers, at a cost of £25 million."--[ Official Report , 1 December 1993 ; Vol. 233, c. 1038.]
Is that the extent of the delegated powers which the Minister has in mind? He is seeking the authority of the House in the money resolution for any Act, which includes Acts which are carried out by means of the delegated powers which the Minister hopes will be approved by the House. The Bill dealing with statutory sick pay does not provide details of the extension of the reimbursement for small firms which the Minister is to give.
Frankly, we should not allow open-ended money resolutions to pass through the House without raising questions. The extent and the degree to which we give delegated powers to Ministers in Bill after Bill is wrong. It is not unreasonable, and it is directly connected with the money resolution, to ask questions of the Minister before we hand over those powers to him. How will he use the delegated powers which are contained in the Bill as they affect the money resolution? At the moment, the information that we have from the Secretary of State is that the arrangements which he is to bring in for small firms will cost about £25 million. That presumably is £25 million which has been authorised by the money resolution. Is that the full extent, or is that figure to increase in future years?
Why was not that information included in the financial effects of the Bill? The Bill was printed on 1 December, but the statement by the Secretary of State was on 30 November. If the information given by the Secretary of State has relevance to the financial effects of the Bill, why was not it included? We are dealing with a money section now. Why was not that information included in the explanatory and financial memorandum?
What is the memorandum for? It is designed to help hon. Members in their understanding of the effects of the Bill. As it is always linked to money resolutions, the memorandum enables hon. Members to have some knowledge of the Minister's ideas when presenting the Bill and obtaining the necessary financial authority through the money resolution. I would ask the Minister why the points made by the Secretary of State were not included in the Bill.
These are relevant questions, and I hope that the Minister, who keeps frowning, will give a reasonable explanation to the House. The three hon. Members who have spoken in the debate have raised pertinent questions. I hope that the Minister will not say, as some do, that he thinks that it is clear in the Bill that the money resolution is wanted and that the House can take it or leave it. We have only 45 minutes and I want to give the Minister time to reply. We have not got much time for the rest of the Bill. The fact is that we are taking the money resolution first because of the desperation of the Government to get the Bill through. Ordinarily, we would be dealing with it later, but the Government are running out
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of time before the Christmas recess. In those circumstances, it behoves the Minister to give the fullest explanation he can, because there will not be much time when the Bill is debated under the guillotine.11.28 pm
Mr. Scott : A brave attempt has been made to press the Government on the reasons for this money resolution. I will attempt to cover the points which have been raised during the short debate.
I want to start with the latter point raised by the hon. Member for Bradford, South (Mr. Cryer). Under the heading, "Financial effects of the Bill", the Bill makes it absolutely clear that clause 1 will reduce annual public expenditure by the various amounts set out in the explanatory and financial memorandum. It makes it clear that "The savings will be offset by reduction of employers' national insurance contributions."
The key reason why we need a money resolution for the Bill does not involve the general impact of the Bill upon employers outside Government. It is to provide the Government with the money they will need to fulfil their responsibilities as an employer under the terms of the Bill.
As the House will be aware, clause 1 will amend the Social Security Contributions and Benefits Act 1992
"so as to abolish the right of employers to recover the 80 per cent. of statutory sick pay paid to employees."
In addition, as I explained earlier, it extends entitlement to SSP to working women who fall sick and become incapable of work after attaining state retirement pension age of 60 until the age of 65. That change is necessary because abolishing reimbursement to SSP turns that into a form of pay rather than a social security benefit. It thus falls outside the scope for the pension age derogation from the equal treatment directive.
The provisions of the Statutory Sick Pay Bill and the Social Security (Contributions) Bill interact. The latter Bill is being introduced at the same time as the SSP provisions to offset the impact of the abolition of the reimbursement of statutory sick pay. It has been made clear that, overall, the impact will be to reduce the burden on business by £100 million more than business is having to expend to meet SSP without any reimbursement at all. In other words, the reduction in national insurance contributions will exceed the extra cost of business by well over £100 million. Business as a whole will not be out of pocket.
I estimate that the impact on the Government of the Statutory Sick Pay Bill and the Social Security (Contributions) Bill, which we will be discussing later this week, will be broadly neutral. However, in terms of the narrow effect of the Statutory Sick Pay Bill, it is necessary to have this money resolution so that the Government can meet their responsibilities in terms of the SSP element. They will also benefit, in the same way as employers outside will, from the national insurance contributions provisions that will apply outside as well as inside Government.
Mr. Cryer : Will the Minister answer my point about extending the compensation to small firms? The definition of small firm is to be raised from those paying £16,000 a year in NI contributions to those paying £20,000, and the Secretary of State said that the additional cost of providing 100 per cent. reimbursement after four weeks would be
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about £25 million. Is that also covered by the money resolution? Will that be the limit? Will it be applied under delegated powers?Mr. Scott : It is of course included in the package being considered by the House this week and it is included in the sums that I have discussed. We have deliberately tilted the balance of the package to give extra help to smaller companies, particularly those employing people on lower earnings. Therefore, any extra burdens that occur are likely to fall on larger employers with higher paid employees. I believe that, for a variety of reasons, the House would expect us to tilt the balance in that direction.
Again, we are going outside the relevant scope and getting into the merits of the legislation that we will discuss later this week. Today, we are concerned with the narrow point that we need the money provided by the resolution so that Departments, in their role as employers, can meet their obligations. We shall be able to conduct the rest of the arguments about the legislation, albeit under a guillotine, later this week.
Mr. Dewar : I shall confine myself to the narrow point that the Minister raises and make sure that I understand it. Is he saying that it is not a case of additional administrative costs for administering the system, that it refers to the additional expense incurred by the Government as an employer, and that there will be women civil servants between the ages of 60 and 65 working after 60--I do not know how many there will be in the civil service, but let us assume that there are some--who will be entitled to statutory sick pay which previously was not available to them?
Is there also another expense arising from the 80 per cent. change? In a sense, that is a little illogical. After all, the Government were reimbursing the employer. It seems rather odd to have the fiction that the Government were receiving reimbursement as employer from themselves as a Government. That is a circular argument and not a genuine increase in expense. Is it only the other argument that the Minister is founding his case on?
Mr. Scott : With respect to the hon. Gentleman, the national insurance fund is contributed to by Departments in their role as employers, in the same way that any other employer has a relationship with the national insurance fund. Departments have the same responsibilities as other employers. The hon. Gentleman is right that it is simply to meet the responsibilities of Departments in their role as employers--not the cost of the number of people administering the scheme, but to cope with the abolition of their right to recover the 80 per cent. and the extra costs of women between 60 and 65.
Mr. Dewar : My intervention will take only a couple of minutes-- [Interruption.] Someone has woken up. I ask the Minister to deal with a Northern Ireland point. It is a genuine curiosity on my part. Exactly the same matter arises in Northern Ireland, but I do not know what the authority for the initial expenditure is. There must be a parallel resolution for the money resolution that we are being invited to pass.
Mr. Scott : For a brief period some years ago, I was Minister for Finance in Northern Ireland. I anticipate that, as the exclusion was at the request of the Northern Ireland
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Department of Health and Social Services, appropriate provision will be made through Order in Council in due course. I could be wrong about that, but, as I recall my experience as Finance Minister in Northern Ireland, it is likely to be the answer.Question put :--
The House divided : Ayes 229, Noes 78.
Division No. 30] [11.37 pm
AYES
Ainsworth, Peter (East Surrey)
Alexander, Richard
Alison, Rt Hon Michael (Selby)
Allason, Rupert (Torbay)
Amess, David
Arbuthnot, James
Arnold, Jacques (Gravesham)
Arnold, Sir Thomas (Hazel Grv)
Ashby, David
Aspinwall, Jack
Atkinson, Peter (Hexham)
Baker, Nicholas (Dorset North)
Baldry, Tony
Banks, Matthew (Southport)
Banks, Robert (Harrogate)
Bates, Michael
Batiste, Spencer
Beggs, Roy
Bellingham, Henry
Bendall, Vivian
Beresford, Sir Paul
Biffen, Rt Hon John
Bonsor, Sir Nicholas
Booth, Hartley
Boswell, Tim
Bowis, John
Brandreth, Gyles
Brazier, Julian
Bright, Graham
Brown, M. (Brigg & Cl'thorpes)
Browning, Mrs. Angela
Bruce, Ian (S Dorset)
Budgen, Nicholas
Burns, Simon
Burt, Alistair
Butcher, John
Carlisle, Kenneth (Lincoln)
Carrington, Matthew
Cash, William
Channon, Rt Hon Paul
Chapman, Sydney
Clappison, James
Clark, Dr Michael (Rochford)
Clifton-Brown, Geoffrey
Coe, Sebastian
Colvin, Michael
Congdon, David
Conway, Derek
Coombs, Simon (Swindon)
Cope, Rt Hon Sir John
Couchman, James
Cran, James
Currie, Mrs Edwina (S D'by'ire)
Day, Stephen
Devlin, Tim
Dorrell, Stephen
Douglas-Hamilton, Lord James
Dover, Den
Duncan, Alan
Dunn, Bob
Durant, Sir Anthony
Dykes, Hugh
Eggar, Tim
Evans, Jonathan (Brecon)
Evans, Nigel (Ribble Valley)
Evans, Roger (Monmouth)
Evennett, David
Faber, David
Fabricant, Michael
Fairbairn, Sir Nicholas
Fenner, Dame Peggy
Fishburn, Dudley
Forman, Nigel
Forsyth, Michael (Stirling)
Fox, Dr Liam (Woodspring)
Fox, Sir Marcus (Shipley)
Freeman, Rt Hon Roger
French, Douglas
Fry, Peter
Gale, Roger
Gallie, Phil
Gardiner, Sir George
Garnier, Edward
Gill, Christopher
Gillan, Cheryl
Goodson-Wickes, Dr Charles
Gorst, John
Greenway, Harry (Ealing N)
Greenway, John (Ryedale)
Griffiths, Peter (Portsmouth, N)
Grylls, Sir Michael
Hague, William
Hamilton, Rt Hon Archie (Epsom)
Hampson, Dr Keith
Hannam, Sir John
Hargreaves, Andrew
Harris, David
Haselhurst, Alan
Hawkins, Nick
Hawksley, Warren
Heald, Oliver
Hendry, Charles
Hicks, Robert
Hill, James (Southampton Test)
Horam, John
Hordern, Rt Hon Sir Peter
Hughes Robert G. (Harrow W)
Hunt, Rt Hon David (Wirral W)
Hunt, Sir John (Ravensbourne)
Hunter, Andrew
Jessel, Toby
Jones, Gwilym (Cardiff N)
Jones, Robert B. (W Hertfdshr)
Jopling, Rt Hon Michael
Kellett-Bowman, Dame Elaine
Key, Robert
Kilfedder, Sir James
Knapman, Roger
Knight, Mrs Angela (Erewash)
Knight, Greg (Derby N)
Knight, Dame Jill (Bir'm E'st'n)
Knox, Sir David
Kynoch, George (Kincardine)
Lait, Mrs Jacqui
Lang, Rt Hon Ian
Lawrence, Sir Ivan
Legg, Barry
Leigh, Edward
Lennox-Boyd, Mark
Lidington, David
Lightbown, David
Lloyd, Peter (Fareham)
Luff, Peter
Lyell, Rt Hon Sir Nicholas
MacKay, Andrew
McLoughlin, Patrick
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