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Mr. Hammond: To continue the culinary metaphor, I sense that the House is anxious to move on to other items on the menu, so I shall attempt to be brief. I am sure that the Minister will be relieved to hear that we will get rid of the big tent a little later on, and that we will resort to our customary small tents pitched on opposite sides of the parliamentary divide.

I am disappointed by the Minister's tone. I did not expect him to accept the new clause, but I hoped that he would make a more significant gesture in respect of the need for ongoing monitoring of the costs and benefits—and I emphasise the latter—arising from the Bill, and their distribution. In the absence of a provision in the Bill requiring that such assessments be made, we shall have to rely on what might be called unmandated assessments by the Department. It will be for Opposition Members to keep the Government on their toes by making sure that the matter remains in focus after the Bill has come into force. We will then be in a better position to evaluate its real impact.

I want to thank my hon. Friends the Member for Cities of London and Westminster (Mr. Field), for Tatton (Mr. Osborne), for Hertford and Stortford (Mr. Prisk) and

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for Boston and Skegness (Mr. Simmonds) for their valuable contributions to the debate. Many small businesses are worried about the Bill's implications for them, and the extent of the burdens that it will impose. It is important that we explore such matters with the Government properly and thoroughly. Finally, while we remain inside the big tent in this debate, I should like to thank the hon. Member for Weston-super-Mare (Brian Cotter) for his support.

The hon. Member for Wolverhampton, South-West (Rob Marris) a couple of times mentioned the proposal in new clause 1 for an assessment of average costs on business. I accept that there is no meaningful concept of an average cost of doing something: different businesses will have different costs. The proposal was an attempt to establish a crude and dirty form of reimbursement that at least would recognise the costs being imposed on business.

I am disappointed that, in the 21st century, Government Members and the Minister are still capable of believing that the Government should legislate to impose benefits on business. If something benefits business, all the Government have to do is to help and encourage it through education so that smaller businesses in particular can be aware of the evidence in support of the assertion that a practice will be beneficial. I can think of no case where there is credible evidence that the Government, using the blunt instrument of legislation, have been best positioned to impose on businesses the benefits that they believe will flow from these measures.

I readily and willingly recognise that, in many cases, there will be benefits from many of the courses of action resulting from the Bill. One of the pities of the Bill is that, in many cases, we are talking about things that good employers are doing and are willing to do, and about areas where the arrangements and relationships between employees and employers are appropriate. The Government are seeking to impose a one-size-fits-all solution by imposing, by statute, a requirement that their practices be followed in every workplace.

I am disappointed by the tone of what the Minister said, but I shall look forward to seeing the evaluations to which he referred. It will be our duty to keep a close watch on those evaluations and to probe their results as they become available. I am sorry to upset the Government Whips, who may have sent out a pager message, but in view of the fact that the debate is tightly timetabled and that there is exciting business further on, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 2

Assessment of effects of widening definition of 'employee'

'.—The powers granted to the Secretary of State in this Act to provide by Regulations that persons who do not fall within the definition of "employee" are to be treated as employees for the purposes of the Act and persons who fall within the definition of employee are not to be treated as employees for the purposes of the Act shall not be exercised until such time as
(1) the Secretary of State has prepared and published an assessment of the need for and expected effects of any proposed exercise of such powers; and

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(2) the Secretary of State has prepared and published an assessment of the expected costs and benefits of any proposed exercise of such powers and of the incidence of such costs and benefits.'.—[Mr. Hammond.]

Brought up, and read the First time.

6.30 pm

Mr. Hammond: I beg to move, That the clause be read a Second time.

The new clause deals with issues that will be familiar to those who served on the Standing Committee. In Committee shorthand, it was known as the "employee versus worker" question. In parts of the Bill, a curious architecture is employed, which is repeated in new clause 6(8)(c). It says that the Secretary of State may by order

We have a counter-intuitive provision in the Bill that allows the Secretary of State to define somebody as an employee and somebody else as his employer, even where they are not in that relationship.

The reason for this provision is that our employment law is somewhat confused. In some places, it refers to employees and in others, it refers to workers—for example, in the minimum wage legislation and the working time directive. EU directives typically refer to workers, rather than employees, but the rules governing transposition of directives into national legislation seem to allow that definition to be narrowed when directives are transposed into domestic law. That seems to be the Government's legal advice. The TUC appears to have different legal advice, which goes to show that one can get as many opinions as one can afford barristers to give them.

There is a dispute in relation to the fixed-term work provision of the Bill. The TUC disputes the Government's interpretation, which is that the EU directive applies only to employees. I understand that the TUC is threatening legal action to clarify the situation in the future.

Who are these workers who are not employees? The Minister can correct me if I am wrong, but probably Members of Parliament, as office holders, are workers—at least some of them are—who are not employees. A more important category of workers who are not employees are agency workers working for a company but not employed by it.

It is important that I set out the Opposition's position. We believe that for the UK to maintain and enhance its competitiveness, it is essential that we maintain flexibility in our work force. We recognise the increasing need in the modern workplace for flexible working. I will argue against anything that reduces flexibility in the labour force.

Some, if not all, elements within the trade union movement appear to regard any form of non-conventional work as "Mickey Mouse" jobs. It is important that we change that attitude through education. We must make it clear that there is a role for flexible and unconventional

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work in our economy to maintain and enhance our productivity and efficiency and to defend Britain's role in the world.

Judy Mallaber: Does the hon. Gentleman accept that most parts of the trade union movement have been keen on allowing flexibility to assist people to have better working arrangements? However, the main aim is to ensure that that flexibility is operated within an environment in which there is still protection for people's rights. We do not want a system in which, for example, an employer can say at the beginning of the day that a worker has to work an extra three hours that night. The question is how we marry decent employment rights to the flexibility that can be of benefit to people in running their lives and to their employers.

Mr. Hammond: It is interesting that the hon. Lady approaches the issue of flexibility purely in terms of flexible working hours. Flexible working arrangements and non-conventional working patterns go wider than that, encompassing fixed-term working and, in some cases, the outsourcing of work, in which someone moves from being an employee to being a self-employed contractor. That has happened in the Post Office in relation to Parcelforce delivery van drivers. The Minister may tell us something about that, as he is an expert on that subject.

There are a range of flexible approaches to work. My perception—I hope I am wrong—is that parts of the trade union movement are still relatively hostile to some of those non-conventional work patterns; for example, to the use of agency workers in business to provide flexibility at the margin to respond to demand.

That must change, but the Opposition are not in the business of defending abuse. If an elaborate ruse has been developed to pretend that somebody is not an employee, that is an abuse and it is right to deal with it. We heard some scary stories in Committee about fixed-term workers who were on their 40th fixed-term, six-month contract, having been in the same place of employment for 20 years. That is not what we are about. We do not want to deny employees proper protection by allowing artificial classifications of their work to continue.

The Secretary of State has instituted a review of the wider issue of the definition of "employee" and "worker" across the board of employment legislation. The Minister said repeatedly in Committee that the Secretary of State would not use the powers she had under the Bill to define a person as an employee and another person as his employer if they were not employee and employer, unless and until the review is completed. The new clause goes further, in that it looks for a proper assessment of the need for and the expected effects of any proposed exercise of these powers.

The new clause looks for the review to produce more than just a decision to do something; it looks for a proper and full appraisal of the arguments for doing something—in other words, the way in which the proposed change is expected to deal with the mischief that is expressed. It would require a full assessment of the expected costs and benefits and their incidence.

The Government come under pressure from the trade unions. I do not suggest that that is improper—they also come under pressure from some Labour Back Benchers. In Committee, some Labour Back Benchers put pressure

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on them rapidly to resolve the employee-worker issue. We are concerned that those powers are unnecessary because, if the Secretary of State waits until the review is completed and a comprehensive approach to that legal problem is formulated, consulted on and properly debated in the House, a broader Bill will be needed to deal with not only the issues raised by the Bill, but existing employment legislation.

We are forced to ask ourselves why such provisions have been included in the Bill. Our concern is that the Minister is perhaps offering a sop to the trade union agenda and the pressure that he is coming under. After all, the Labour party received £9 million from the trade unions at the last election, and it is not surprising if the Government are asked for something in exchange. The Minister is wincing. Was the figure not £9 million? If the figure was slightly different, he will no doubt correct me. Compared to the Formula 1 and Hinduja scandals, £9 million is a tremendously large sum and we might expect some pressure to be put on the Government.

Can we be sure that the review is not a cosmetic exercise? Can we be sure that the Government have not already decided to bow to that bit of the trade union agenda and cave in on the employee-worker issue? Under new clause 2, we seek to place at the end of the current review process a rigorous and proper assessment of the need for and the effects of the proposed exercise and its costs and benefits. The purpose is simply to ensure that there is a proper, fully informed debate.

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