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Mr. Hammond: The Minister said that none of the new clauses referred to the benefits, but that is not the
case. New clause 1 specifically asks for an assessment of the distribution of both the costs and the benefits of the Bill.
Alan Johnson: I stand corrected on new clause 1, but the Conservatives' whole approach to the debate, including—with a few honourable exceptions—practically all their contributions, has concentrated on the costs rather than the benefits.
It is true that many of the substantial benefits that will arise for employers are difficult to quantify in financial terms. None the less, it would be wrong to discount them. We do not want to fall into the trap that Oscar Wilde once described, of knowing the cost of everything and the value of nothing.
Mr. Prisk: One of the key points that we have tried to get across to the Minister is why we feel that there should be a continuing assessment. The reasons are that this is an enabling Bill, not a static item that can be costed instantly, and because things will change and the Secretary of State will have powers to add new elements. That argument lies behind our case, and I do not think that the Minister has tackled it.
Alan Johnson: If the hon. Gentleman saw me smile just then, I should let him know that I was not smiling at what he was saying; it is just that I could have done without the pager message saying, "Vote on new clause expected soon". I shall deal with the hon. Gentleman's point in a moment; there is a special little bit of my speech dedicated to him.
There are benefits that can be quantified. Good employment relations lead to improved productivity, better retention of employees and reduced recruitment costs. The average cost of filling a vacancy in 2001 was nearly £4,000—up over 11 per cent. on the previous year—and it is often small firms that find it most damaging to lose valuable staff. If only 10 per cent. of the women who currently do not return to work after maternity leave decided to return as a result of the improvements in maternity rights, employers could save up to £39 million each year in recruitment costs alone.
We are also taking the pain out of administering the new benefits by enabling employers to claim back in advance the moneys that they are paying out. Small firms will get back more than 100 per cent. of their payments. We are almost doubling the number of small employers who qualify for that benefit, and that is an important step forward.
Like me, Mr. Deputy Speaker, you may remember that once, all employers received 100 per cent. reimbursement of statutory maternity pay, so you, like me, might have wondered where that went, and why they now get only 92 per cent. Lo and behold, it was the Conservative Government in 1994, who reduced the percentage.
Mr. Lindsay Hoyle (Chorley): Never.
Alan Johnson: Yes, that comes under the category of "Strange but True"—an item that I used to read every week in The Eagle. It was the party that is now telling us that we have to pay more attention to business, and not load burdens onto it, that cut the reimbursement of statutory maternity pay from 100 per cent. to 92 per cent.
just eight years ago. To coin a phrase, this is a win, win, win scenario. Employers, working people and the economy all gain.The new statutory procedures for dispute resolution recognise the needs of businesses, both small and large. Avoiding costly, stressful and time-consuming litigation will benefit employers, employees and the employment tribunal system. The benefits should become apparent in the second year after the introduction of the procedures, producing an annual saving for businesses of between £60 million and £80 million.
What I said earlier about the number of cases is an honest assessment of how things will look in four or five years' time. The number of cases may have tripled—incidentally, they doubled before any new rights were introduced. That must mean that we have a healthier society in which people are more aware of their rights and less afraid to use them. They are more assertive, and they have more rights to be aware of; I do not apologise for that. I think that there is a consensus, even among Conservative Members, that age discrimination and so on should be tackled, so it would be strange if we did not envisage that at some stage the number of cases would pick up. Current estimates are based on the current number of cases, and we are expecting to make savings. When the new jurisdictions are introduced, having a procedure in the workplace will help to resolve the issues without a tribunal.
Mr. Hammond: The Minister is in danger of having his last remarks misinterpreted. He appeared to suggest that, as people become more aware of their rights, he welcomes the fact that they are taking more litigious action in support of them. Is he saying that a move towards a more litigious society is to be welcomed?
Alan Johnson: Not at all. I am suggesting that as so many workers now have no opportunity to exercise those rights so that problems can be resolved in the workplace, it must be right for us to introduce the changes in the Bill.
6.15 pm
I do not accept that employers should have the right to recover their average costs of complying with each of the requirements of the Bill from the public purse, any more than they should have the right to recover their costs in administering PAYE, national insurance, tax credits or VAT. The best employers already bear many of those costs, because they already recognise the value of providing their employees with those rights.
We understand the pressures that new regulation puts on business. We have, rightly, spent much time in Committee discussing the proposals, and we are committed to sympathetic implementation of the Bill and to ensuring that employers and employees have enough time to understand and plan for the changes. We will provide clear, accessible, user-friendly guidance to all, particularly small businesses. The Inland Revenue has also expanded the range of help available through business support teams, which now provide one-to-one on-site assistance to employers on every aspect of their obligations in respect of Inland Revenue business.
The hon. Member for Runnymede and Weybridge said that some employees would gain from the Bill and some would not. He mentioned flexible working, and I want to address that point again, because I agree with my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) on that. It is good of him to join us tonight. He is taking a break from his endeavours to become a father, so I hope that he can hang around until the end of the debate.
My hon. Friend was right to point out that we have a two-pronged approach. There is regulation; we are introducing the measures for parents of children under six because we do not want to miss out a generation. Best practice often emerges from small businesses, which have some cracking arrangements for flexible working, which help to recruit and retain staff. We are spreading that best practice for parents and small children.
As the hon. Member for Runnymede and Weybridge recognised, we all have a stake in helping to ensure that children are raised properly. We cannot wait a generation. There is also the work-life balance campaign. We have an enormous interest in spreading best practice for flexible working even when it is unrelated to parenthood. It might be that people have other caring responsibilities, or simply want to pursue a hobby. This is a two-pronged attack.
I have heard the backlash argument from several quarters, although the hon. Member for Runnymede and Weybridge did not put it so—[Interruption.] That is true; he did not put it at all—but that does not stop me from replying to the point, in case he does put it.
The backlash argument diminishes and insults working people, who in the wide consultation that we conducted in workplaces never once raised that idea. Of course, they understood the need for mothers and fathers to spend more time with their small children, and yes, many of them said that they would like the same kind of flexible arrangements for themselves, but they did not say it out of resentment.
Mr. Hammond: I shall put that argument now, in response to the Minister. Just for the record, does he acknowledge that when it is ruled either by the courts or through new statutory provisions that, for example, a policewoman with a small child does not have to work a night shift, by definition her colleagues who are not mothers of small children will have to work more undesirable night shifts? Is that not a logical and inevitable consequence?
Alan Johnson: That is a depressing approach to the clause. The answer to the question is no, not at all. In the vast majority of cases, such problems are resolved when one employee suggests that a change in shifts would be beneficial, and then finds a colleague willing to change out of a rigid shift system.
Mr. Hammond indicated dissent.
Alan Johnson: The hon. Gentleman shakes his head, but it requires only a little thought and imagination to break away from the rigid systems that developed when women were largely absent from the workplace because only men had full-time jobs. I think that the hon. Gentleman is wrong in that regard.
I am conscious that I need to make some progress. My hon. Friend the Member for Wolverhampton, South-West also referred to ACAS, and the hon. Member for Runnymede and Weybridge was right in new clause 4, to draw attention to that body's importance in matters covered by parts 2 and 3 of the Bill. However, in seeking an assessment of additional resources likely to be required by ACAS when the measures in this Bill are implemented, the hon. Gentleman is once again concentrating on costs and ignoring benefits. It is clear from the responses received from all parties to the "Routes to Resolution" consultation paper that the services of ACAS are highly regarded. That body will play a key role in ensuring that businesses, especially small businesses, have the advice and guidance that they need.
We fully support that role. During the financial period 1998–99 to 2000–01, funding for ACAS has increased from £26.2 million to £32.4 million, a rise of 23 per cent. As I said earlier, the regulatory impact assessment of the Bill already refers to the possible costs to, and efficiency gains for, ACAS arising from the implementation of parts 2 and 3 of the Bill. However, the hon. Member for Runnymede and Weybridge will be aware that the employment tribunals system taskforce, set up by my Department and the Lord Chancellor's Department and headed by Janet Gaymer, is considering the resources of the employment tribunal system as a whole. The operational impact on both ACAS and the ETS of the policies included in parts 2 and 3 will be part of that consideration. The taskforce reports in spring this year, and we shall take account of all its recommendations when considering the funding needs of ACAS.
As I said earlier, however, there are benefits as well as costs to consider. The dispute-resolution measures in the Bill are designed to encourage parties to resolve their problems in the workplace. That should reduce the number of cases resorting to litigation and using ACAS services. Secondly, clause 24 introduces a fixed conciliation period. That will free up conciliators' time to deal with claims in which both parties are engaged in the conciliation process, and will allow ACAS to concentrate on the cases where its expertise is needed most.
Overall, the policies in the Bill strike a balance between rights and responsibilities in the workplace. I was shocked and surprised by what the hon. Member for Weston–super–Mare (Brian Cotter) said. People are rushing in and out of my tent at great speed, but the hon. Gentleman was guilty of trying to have it both ways. Liberal Democrat Members seem to lurch from one position to another, depending on whether they are trying to win seats in the north or the south-west. We well remember that they opposed the windfall levy that supported the new deal, and that they supported a regional minimum wage. Now, almost alone, they propose that the national rate for the minimum wage should be available for people aged 16. That is an incredible change from their original policy. I am therefore disappointed with the hon. Gentleman, who needs to rethink his approach to the Bill.
The hon. Member for Runnymede and Weybridge asked whether I could say anything about the Carter committee, or whether it was a state secret. The Small Business Service has conducted a series of focus groups to obtain views about the recommendations made by Patrick Carter in his payroll review. Small businesses and other interested parties participated fully.
The SBS subsequently submitted a report to the Inland Revenue that will feed into the consultation process. However, I am afraid that Conservative Members will have to wait for the Budget report for more details, as the Carter committee was set up by my right hon. Friend the Chancellor of the Exchequer. I have no news of any imminent report.
The hon. Member for Hertford and Stortford (Mr. Prisk) said that the regulatory impact assessment was incomplete and uncosted. He suggested too that the cost of following the regulations provided for in the Bill was not included in the assessment. The implication was that those costs would be the wine bill that would follow the bill for the main courses.
I can tell the hon. Member for Runnymede and Weybridge that the RIA will be updated and placed before the House with all secondary legislation fully costed. However, the RIA that is in both Libraries of the House contains the best estimates of the costs of meeting both primary and secondary legislation. It is therefore wrong to say that the existing RIA does not cover the costs of meeting requirements imposed by secondary legislation. I am aware that Opposition Members have tried to add to the costs imposed by the Bill, and a later amendment that would extend statutory paternity pay to the self-employed would carry with it a considerable cost.
I do not believe that we have to make a choice between helping business and helping the work force. I believe that we can do both. The evaluations that we conduct will look at costs but also at benefits for employers and public funds. They will take account of the time that it takes for the impacts to be felt. I hope that I have reassured the hon. Member for Runnymede and Weybridge that these amendments are unnecessary. An assessment of the kind proposed in new clause 1 would be too narrow, too soon, and conducted too often. The proposal in new clause 3 could well mean more bureaucracy and red tape for employers, and the proposal in new clause 4 would duplicate work already in hand.
I ask the hon. Member for Runnymede and Weybridge to withdraw the amendments. Failing that, I hope that the House will reject them.
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