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3.45 pm
Mrs. Angela Browning (Tiverton and Honiton): Before the Minister continues, will he clarify what will be the basis of the calculation of earnings for self-employed women in the year that they claim the benefit? I ask that question because when self-employed people file their accounts with the Inland Revenue, the last set of accounts may be for the previous financial year. Will the accounts for the previous financial year be taken to establish earnings, or will, for example, the previous three years be averaged out, which is not unprecedented for self- employed people in our tax system? What about the woman who becomes pregnant in her first year of self-employment? On what basis will her earnings be calculated?
Mr. Bayley: The hon. Lady raises an important point. I regret to say that I cannot respond immediately, but I will do so before the debate concludes as it is important for the House to be absolutely clear about how the earnings are to be calculated. Of course, we will retain the existing rules for calculating the earnings of self-employed people. The change is that in the past the self-employed have been unfairly treated because they have received a lower rate of maternity allowance. As a result of our change, self-employed women will now receive the full rate of benefit--£59.55 instead of £51.70, which is an increase of £7.85 a week.
Also, we are helping self-employed women with low earnings. If they hold a certificate to exempt them from national insurance contributions, they will be treated as having notional earnings of £30 a week and will receive maternity allowance of £27 a week--90 per cent. of £30.
To summarise, as a result of the changes, low-paid women who earn below the lower earnings limit for national insurance contributions and at least £30 a week will receive maternity allowance of 90 per cent. of their
average earnings. Women with more than one low-paying job will be able to add together their earnings to reach the level needed to qualify for maternity allowance.
Mr. Steve Webb (Northavon):
The Minister mentioned the category of women whose wages are between £30 and the lower earnings limit and we support the extension of the allowance to them. Clearly, that group do not pay income tax or national insurance and, therefore, are largely unknown to the authorities. What will be the Government's take-up strategy to ensure that people claim that new entitlement?
Mr. Bayley:
We will be using similar means to those that we use to ensure take-up at the moment to inform the self-employed of their rights.
Mr. Webb:
What about employers?
Mr. Bayley:
I thought that the hon. Gentleman was talking about the self-employed. Clearly, employers will have a responsibility to pass on information to employees, as they do with existing employees.
Mr. Duncan Smith:
I was intrigued by the Minister's answer. He seemed rather hesitant. Is there some mechanism whereby employers will know clearly that they will have to pass on that information and has he costed the changes that that would entail?
Mr. Bayley:
The basic mechanism for establishing entitlement to maternity allowance is to show a wage slip. Every employer, however large or small, has a legal obligation to provide a wage slip for employees. It will be the passport to maternity allowance for those on low wages, as it has been for those on higher wages.
To summarise, low-paid women who earn below the lower earnings limit, provided that they earn at least £30 a week, will receive maternity allowance worth 90 per cent. of their average earnings. Women with more than one low-paid job will be able to add together their earnings to reach the level necessary to qualify for maternity allowance. Self-employed women will receive the same basic rate of maternity allowance as employees. Low-earning, self-employed women who are exempted from paying national insurance contributions will qualify for maternity allowance of £27 a week.
The Labour party has long campaigned for these reforms. Now that we are putting them into practice, they have been warmly welcomed by many voluntary bodies including the Maternity Alliance and the Low Pay Unit. These important changes will enable more women to strike a balance between paid work and parenting. They are fully in line with our strategy on family friendly employment. They will give low-paid mothers-to-be the financial help that they need to take their full entitlement of maternity leave. They will be good for the healthand welfare of low-paid mothers and their children. I commend them to the House.
Mrs. Jacqui Lait (Beckenham):
It is a pleasure to join the debate, but I am sorry to have to speak to new clause 5 because, as my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said, it adds to an already extensive Bill. The Minister listed the
New clause 5 is an unnecessarily hurried addition to our debate. We have complained that the Bill is already far too long but, now, new clause 5 has been tabled at the last moment. My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) pointed out the difficulties that self-employed women will have. The hon. Member for Carshalton and Surbiton--
Mrs. Lait:
My apologies; there are so many experts on the subject in the Liberal party. The hon. Member for Northavon (Mr. Webb) made a point to which answer came there none. We all know that the consultation has not finished, so why the rush to discuss new clause 5? We are happy to debate it, but cannot help wondering why we must do it today. We had no hint of it in Committee and, my goodness, it was a long Committee. We even sat on Budget day without any such hint. The Chancellor mentioned the proposal, en passant, in the Budget debate, as did the Secretary of State for Social Security, who also mentioned this Bill in that debate, but without putting the two together. No connection between them was made.
I am not naturally of a conspiratorial turn of mind. I prefer the more random view of life, but I wonder why new clause 5 has suddenly emerged. It is 15 months before its provisions come into effect.
Mr. Duncan Smith:
It is a sop.
Mrs. Lait:
Looking around the Government Benches, I can only agree, that it may be a sop. One or two may just fall for it. I am more inclined to believe that, while it has something to do with the later amendments, it is more likely that the Government desperately hope that any vote on the later amendments takes place at the dead of night.
The new clause was tabled last thing on Thursday because the Government took one look at the list of amendments that had already been tabled, noticed that the Opposition had not tabled their amendments and panicked. The Secretary of State sent out his messengers like Lars Porsena of Clusium. They went out north and south, east and west. The Chancellor of the Exchequer obliged and decided to let the Secretary of State for Social Services have the honour of proposing the amendment set out in the Budget. The Government are trying desperately to hold off a debate and vote on benefit cuts. However, the debate is taking place before any consultation has finished. I am surprised that the Government should do such a thing. There is much in the Bill to discuss, and we shall make sure that it is discussed.
Last week, we had a debate, introduced by the Liberal Democrats, on the abuse of Parliament. Those who were present will remember that they were not even effective enough to be able to vote on the motion. However, during the debate, my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley) made an excellent point about the abuses that the House is facing.
Mr. Dale Campbell-Savours (Workington):
On a point of order, Madam Speaker.
Madam Speaker:
Does the point of order concern relevance?
Mr. Campbell-Savours:
It does.
Madam Speaker:
I think that the hon. Member for Beckenham (Mrs. Lait) is coming to her point.
Mrs. Lait:
I am indeed, Madam Speaker. However, one of the factors in this debate is the speed with which the new clause was tabled and the lack of consultation.
We have before us another example of the abuse that the House is suffering. We could easily have discussed the new clause in Committee. It could easily have been laid before the Committee. Once the split among those on the Government Benches became clear, we had to discuss the new clause.
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