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Mr. Iain Duncan Smith (Chingford and Woodford Green): Will the Minister, having read the Committee proceedings, again confirm that the Government recognise that, with the Bill's passage, they will be placing another burden on small businesses?
Mrs. Roche: If one considers everything that the Government are doing to help small businesses--in the Budget, by establishing the Small Business Service and setting the lowest-ever corporation tax levels, with our better regulation task force and unit, and in the positive help that will be provided in the Bill's provisions--one cannot accept the hon. Gentleman's comment.
I wonder whether Opposition Members have thought through the practical difficulties of implementing their amendment No. 8 or any other provision that would exempt employers by reference to their number of employees.
In making assessments for tax credits and deciding whether payment through the payroll is appropriate in a specific case, the Inland Revenue will have to rely on information given on the application form. The only other possible source of information is the annual returns provided by employers who operate the PAYE scheme. It would not be a simple matter to identify from an employee's application form the total number of employees working for the same employer, and trying to do so would cause real difficulty--possibly causing delay for applicants and requiring further involvement by employers. Therefore, all the burdens described
by Opposition Members would increase if their amendment were passed. In all doubtful cases, the Revenue would have to check the facts with employers.
As we have repeatedly stressed in debates on the Bill, we are committed to keeping to an absolute minimum any additional burdens on employers. With that mind, we have given careful thought to the position of employers who do not deduct PAYE or national insurance contributions from the wages they pay because none of their employees earns above the threshold for national insurance contribution. Those employers currently have no dealings with the Inland Revenue in their role as employers. Without an exemption, they would be brought into the Revenue's employer database, simply because they have an employee who receives tax credit. As they have no PAYE tax or national insurance contributions out of which to pay tax credits, they will always have to be funded by the Inland Revenue--in many cases, on a weekly basis.
For all those reasons, we have decided that employers who do not deduct PAYE tax or national insurance contributions from the pay of any of their employees will be exempt from paying tax credit through the payroll. The exemption will remove from the scheme about 80,000 employers. That is absolutely targeted action. I hope that that answers the question of the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith)--or is he right hon.?
Mr. Duncan Smith
indicated dissent.
Mrs. Roche:
I am always anxious to assist the promotion prospects of Opposition Members--[Interruption.] No, I should not go as far as that; just wait and see.
The provision is clear, targeted and makes absolutely good sense. The exemption is also clearly stated in published regulations.
I am sure that the hon. Members who tabled this group of amendments are genuinely concerned about the matter. However, they have not mentioned all the steps that the Government are taking to design a scheme that is as employer friendly as possible--which is why we have been consulting, and continue to consult, representatives of employers and payroll software suppliers, many of whom have provided valuable contributions to designing the scheme. I am very grateful to all those employers organisations who have assisted us in the matter.
We have also started an education programme for all employers that will operate both before and after April 2000. We shall pay very close attention to providing information. The plan is that employers' information packs will be issued next January and will include detailed tax credit examples, showing employers exactly what they have to do.
I am glad to see that Opposition Members are paying attention to the important information that I am giving them. [Hon. Members: "We are."] I just wanted to ensure that they were still with us.
The Revenue is planning, from July 1999, to hold seminars for employers, which will be backed up by trade press advertisements and feature link promotions in the regional press. I would have thought that Conservative
Members would be interested in measures for business. They claim to support business, but their conduct this evening shows why they lost the small business vote at the general election.
The amendments clearly do not make sense and I urge my hon. Friends to reject them.
Mr. Gibb:
The hon. Lady has just accepted that 70,000 employers with employees who are paid less than the national insurance threshold can easily be taken out of the system. She accepts that the system will be a burden for them. Why will she not extend the exemption to all employers who employ fewer than 10 employees? If she can do it for one group, why not for the other?
Mrs. Roche:
The hon. Gentleman clearly has not read all the material properly. If he had, he would understand. How could the tax credits system be implemented without a PAYE system through which it could operate?
Mr. Gibb:
The hon. Lady is right to exempt those 70,000 employers from the system, because it would be an intolerable burden on them. It will also be an intolerable burden on the 630,000 employers who employ fewer than 10 employees. She has just admitted that. She has talked about the proportion of businesses that would be taken out of the working families tax credit system if our amendment was accepted--70 per cent. if the threshold was 10 employees. That is a plus point, because the purpose of the Bill is not to change the behaviour of employers, but, in her words, to change the behaviour of employees. The amendment would take only 14 per cent. of eligible employees out of the system, leaving 86 per cent.
In view of the hon. Lady's inadequate answer, I shall press the amendment to a vote.
Question put, That the amendment be made:--
The House divided: Ayes 150, Noes 291.
Tellers for the Ayes:
Tellers for the Noes:
Question accordingly negatived.
Amendments made: No. 11, in page 16, line 26, leave out 'Paragraphs (a) and (b)' and insert
AYES
Allan, Richard
Ancram, Rt Hon Michael
Arbuthnot, Rt Hon James
Ashdown, Rt Hon Paddy
Atkinson, David (Bour'mth E)
Baker, Norman
Ballard, Jackie
Beggs, Roy
Bercow, John
Beresford, Sir Paul
Body, Sir Richard
Boswell, Tim
Bottomley, Rt Hon Mrs Virginia
Brake, Tom
Breed, Colin
Brooke, Rt Hon Peter
Browning, Mrs Angela
Bruce, Ian (S Dorset)
Burnett, John
Burns, Simon
Burstow, Paul
Butterfill, John
Cash, William
Chapman, Sir Sydney
(Chipping Barnet)
Chidgey, David
Chope, Christopher
Clark, Dr Michael (Rayleigh)
Clifton-Brown, Geoffrey
Colvin, Michael
Cormack, Sir Patrick
Cotter, Brian
Cran, James
Curry, Rt Hon David
Davis, Rt Hon David (Haltemprice & Howden)
Day, Stephen
Donaldson, Jeffrey
Dorrell, Rt Hon Stephen
Duncan Smith, Iain
Evans, Nigel
Faber, David
Fabricant, Michael
Fallon, Michael
Fearn, Ronnie
Forth, Rt Hon Eric
Foster, Don (Bath)
Fowler, Rt Hon Sir Norman
Fox, Dr Liam
Fraser, Christopher
Garnier, Edward
George, Andrew (St Ives)
Gibb, Nick
Gill, Christopher
Gorman, Mrs Teresa
Gorrie, Donald
Gray, James
Greenway, John
Grieve, Dominic
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Harris, Dr Evan
Hayes, John
Heald, Oliver
Heathcoat-Amory, Rt Hon David
Horam, John
Howard, Rt Hon Michael
Howarth, Gerald (Aldershot)
Hughes, Simon (Southwark N)
Hunter, Andrew
Jack, Rt Hon Michael
Jackson, Robert (Wantage)
Jenkin, Bernard
Johnson Smith,
Rt Hon Sir Geoffrey
Keetch, Paul
Key, Robert
Kirkbride, Miss Julie
Kirkwood, Archy
Lait, Mrs Jacqui
Lansley, Andrew
Leigh, Edward
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Lidington, David
Lilley, Rt Hon Peter
Lloyd, Rt Hon Sir Peter (Fareham)
Loughton, Tim
Luff, Peter
Lyell, Rt Hon Sir Nicholas
MacGregor, Rt Hon John
McIntosh, Miss Anne
McLoughlin, Patrick
Madel, Sir David
Maginnis, Ken
Malins, Humfrey
Maples, John
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
May, Mrs Theresa
Michie, Mrs Ray (Argyll & Bute)
Moore, Michael
Moss, Malcolm
Norman, Archie
Oaten, Mark
Öpik, Lembit
Page, Richard
Paice, James
Paterson, Owen
Pickles, Eric
Randall, John
Redwood, Rt Hon John
Rendel, David
Robathan, Andrew
Robertson, Laurence (Tewk'b'ry)
Roe, Mrs Marion (Broxbourne)
Rowe, Andrew (Faversham)
Ruffley, David
Russell, Bob (Colchester)
St Aubyn, Nick
Sanders, Adrian
Sayeed, Jonathan
Shephard, Rt Hon Mrs Gillian
Smith, Sir Robert (W Ab'd'ns)
Smyth, Rev Martin (Belfast S)
Spelman, Mrs Caroline
Spicer, Sir Michael
Steen, Anthony
Streeter, Gary
Swayne, Desmond
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher & Walton)
Taylor, Rt Hon John D (Strangford)
Taylor, John M (Solihull)
Taylor, Sir Teddy
Tonge, Dr Jenny
Tredinnick, David
Trend, Michael
Tyler, Paul
Tyrie, Andrew
Wallace, James
Wardle, Charles
Waterson, Nigel
Webb, Steve
Whitney, Sir Raymond
Whittingdale, John
Wilkinson, John
Willetts, David
Willis, Phil
Winterton, Mrs Ann (Congleton)
Woodward, Shaun
Young, Rt Hon Sir George
Mrs. Eleanor Laing and
Mr. Tim Collins.
NOES
Abbott, Ms Diane
Adams, Mrs Irene (Paisley N)
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Allen, Graham
Armstrong, Ms Hilary
Ashton, Joe
Atherton, Ms Candy
Atkins, Charlotte
Austin, John
Barnes, Harry
Barron, Kevin
Battle, John
Bayley, Hugh
Beard, Nigel
Beckett, Rt Hon Mrs Margaret
Begg, Miss Anne
Bell, Stuart (Middlesbrough)
Benn, Rt Hon Tony
Bennett, Andrew F
Benton, Joe
Bermingham, Gerald
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Borrow, David
Bradley, Keith (Withington)
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brinton, Mrs Helen
Brown, Rt Hon Nick (Newcastle E)
Brown, Russell (Dumfries)
Browne, Desmond
Buck, Ms Karen
Burgon, Colin
Butler, Mrs Christine
Caborn, Richard
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Ronnie (Blyth V)
Canavan, Dennis
Caplin, Ivor
Casale, Roger
Caton, Martin
Chapman, Ben (Wirral S)
Chaytor, David
Chisholm, Malcolm
Clapham, Michael
Clark, Rt Hon Dr David (S Shields)
Clark, Dr Lynda
(Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Clarke, Rt Hon Tom (Coatbridge)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coffey, Ms Ann
Coleman, Iain
Connarty, Michael
Cook, Frank (Stockton N)
Cooper, Yvette
Corbett, Robin
Corston, Ms Jean
Cousins, Jim
Cox, Tom
Cranston, Ross
Crausby, David
Cryer, Mrs Ann (Keighley)
Cummings, John
Cunliffe, Lawrence
Cunningham, Jim (Cov'try S)
Dalyell, Tam
Darling, Rt Hon Alistair
Darvill, Keith
Davies, Rt Hon Denzil (Llanelli)
Davis, Terry (B'ham Hodge H)
Dawson, Hilton
Dean, Mrs Janet
Denham, John
Dismore, Andrew
Dobbin, Jim
Donohoe, Brian H
Doran, Frank
Eagle, Angela (Wallasey)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Ennis, Jeff
Etherington, Bill
Ewing, Mrs Margaret
Fisher, Mark
Fitzpatrick, Jim
Fitzsimons, Lorna
Flint, Caroline
Flynn, Paul
Follett, Barbara
Foster, Rt Hon Derek
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Foulkes, George
Fyfe, Maria
Galloway, George
Gerrard, Neil
Gibson, Dr Ian
Gilroy, Mrs Linda
Goggins, Paul
Golding, Mrs Llin
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Grocott, Bruce
Grogan, John
Hall, Patrick (Bedford)
Hanson, David
Healey, John
Henderson, Ivan (Harwich)
Hepburn, Stephen
Heppell, John
Hewitt, Ms Patricia
Hill, Keith
Hoey, Kate
Home Robertson, John
Hoon, Geoffrey
Hope, Phil
Hopkins, Kelvin
Hoyle, Lindsay
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Jackson, Ms Glenda (Hampstead)
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C)
Jones, Dr Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Keen, Ann (Brentford & Isleworth)
Kemp, Fraser
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
King, Ms Oona (Bethnal Green)
Kingham, Ms Tess
Ladyman, Dr Stephen
Lawrence, Ms Jackie
Laxton, Bob
Leslie, Christopher
Levitt, Tom
Lewis, Terry (Worsley)
Linton, Martin
Lloyd, Tony (Manchester C)
Lock, David
Love, Andrew
McAllion, John
McAvoy, Thomas
McCabe, Steve
McCafferty, Ms Chris
McDonagh, Siobhain
Macdonald, Calum
McDonnell, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
McNamara, Kevin
McNulty, Tony
MacShane, Denis
Mactaggart, Fiona
McWalter, Tony
Mahon, Mrs Alice
Mallaber, Judy
Marsden, Gordon (Blackpool S)
Marsden, Paul (Shrewsbury)
Marshall, David (Shettleston)
Marshall, Jim (Leicester S)
Martlew, Eric
Maxton, John
Merron, Gillian
Michie, Bill (Shef'ld Heeley)
Moonie, Dr Lewis
Moran, Ms Margaret
Morgan, Alasdair (Galloway)
Morgan, Ms Julie (Cardiff N)
Morgan, Rhodri (Cardiff W)
Morley, Elliot
Morris, Ms Estelle (B'ham Yardley)
Mountford, Kali
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Murphy, Rt Hon Paul (Torfaen)
Norris, Dan
O'Brien, Bill (Normanton)
O'Brien, Mike (N Warks)
O'Hara, Eddie
Olner, Bill
O'Neill, Martin
Organ, Mrs Diana
Osborne, Ms Sandra
Palmer, Dr Nick
Pearson, Ian
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pope, Greg
Powell, Sir Raymond
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prescott, Rt Hon John
Primarolo, Dawn
Prosser, Gwyn
Purchase, Ken
Quin, Rt Hon Ms Joyce
Rapson, Syd
Raynsford, Nick
Reid, Rt Hon Dr John (Hamilton N)
Roche, Mrs Barbara
Rooney, Terry
Ross, Ernie (Dundee W)
Roy, Frank
Ruane, Chris
Ruddock, Joan
Russell, Ms Christine (Chester)
Ryan, Ms Joan
Savidge, Malcolm
Sawford, Phil
Sheerman, Barry
Sheldon, Rt Hon Robert
Simpson, Alan (Nottingham S)
Singh, Marsha
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, Llew (Blaenau Gwent)
Soley, Clive
Southworth, Ms Helen
Squire, Ms Rachel
Starkey, Dr Phyllis
Steinberg, Gerry
Stevenson, George
Stewart, David (Inverness E)
Stewart, Ian (Eccles)
Stinchcombe, Paul
Stoate, Dr Howard
Stott, Roger
Stringer, Graham
Stuart, Ms Gisela
Sutcliffe, Gerry
Taylor, Rt Hon Mrs Ann
(Dewsbury)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)
Thomas, Gareth R (Harrow W)
Todd, Mark
Touhig, Don
Trickett, Jon
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Turner, Dr George (NW Norfolk)
Twigg, Derek (Halton)
Twigg, Stephen (Enfield)
Vaz, Keith
Vis, Dr Rudi
Walley, Ms Joan
Ward, Ms Claire
Wareing, Robert N
Watts, David
White, Brian
Wicks, Malcolm
Williams, Alan W (E Carmarthen)
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Wood, Mike
Worthington, Tony
Wright, Anthony D (Gt Yarmouth)
Wright, Dr Tony (Cannock)
Wyatt, Derek
Jane Kennedy and
Mr. Jim Dowd.
Amendment made: No. 14, in page 8, line 17, after 'Board', insert
'or the Secretary of State'.--[Dawn Primarolo.]
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