Employment Bill

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Norman Lamb: The problem of delaying for so long is that my point has long since been lost. I wanted to suggest to the hon. Gentleman that the principle of transferring a burden from the state to employers worked with a vengeance during the years of Conservative Government—for example, responsibility for statutory sick pay had been a burden on the Government, but was transferred to employers with a massive cost burden. In a small firm employing perhaps 10 people, the occasions on which it will have to administer payment for paternity leave will not be frequent—perhaps once every one or two years one person will take two weeks' paternity leave. Should we not be pragmatic and say that the cost on the small firm of administering that one employee's paternity leave will not be great? The burden must fall somewhere and, given that the cost of paternity leave will fall generally on taxpayers, it is surely not too much to expect a small firm to bear the cost of administering the paternity leave of one employee. If the Conservatives intend fully to embrace the concept of paternity leave, surely it makes sense to follow the same principles applying to maternity leave during the short two-week period of paid paternity leave.

Mr. Hammond: I do not want to argue with the hon. Gentleman. The trend has continued for some time and I detect roots planted before 1 May 1997, but the Government have accelerated the trend and are doing so further in the Bill. If my memory is correct, the previous Conservative Administration reduced employers' national insurance contributions to compensate for the cost burden of statutory sick pay.

Norman Lamb: Not fully.

Mr. Hammond: That may be so. I agree that it would be impracticable to think in terms of a £2.34 weekly administration payment for each person on statutory sick pay. I am asking the Minister about the principle that the overall cost of administering such schemes—or, if the Government wanted to be more generous, the estimated saving to the Government of not having to administer the scheme directly, which would be a much higher figure—should be recognised as a credit to employers. That could be done through a national insurance contribution credit for small employers—a straight percentage reduction in employers' rate of national insurance contributions. I am addressing the principle, and it offends me—it

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offends all employers—that the Government seem to believe that it is legitimate to transfer burdens successively and in an accelerating pattern from the state to employers, transferring that administrative cost without any form of recognition at all. It just will not do for the Minister to say, ''We don't pay people for doing their tax returns so why should we pay employers for carrying out administrative work on behalf of the Government?'' I do not think that that is a reasonable position for him to take.

I have focused my remarks on the administrative cost element. It does not appear to me self-evident that large employers should meet 8 per cent. of the cost of statutory pay together with the full national insurance contribution. That could total a fairly significant figure, and we are not talking only about paternity pay, but about other areas as well. I think that that leads to a more general debate about where the benefits of part 1 of the Bill will be felt and how the burdens should be shared. I hope that we will be able to have that debate later today, although in view of the timetable that has been imposed, we shall have to speed up our consideration of the Bill to have that opportunity—[Interruption.] The Government Whip is chuntering from the Front Bench. I did not catch the exact import of his remarks, although I suspect that I can guess their general drift.

11 am

Rob Marris (Wolverhampton, South-West): The hon. Gentleman addresses the administrative burdens on business, as did the hon. Member for Hertford and Stortford. There are always trade-offs in society. There are administrative costs, and the hon. Member for Runnymede and Weybridge mentioned those for small employers. However, many businesses recite the mantra that people are their most important asset. There are significant education costs for a labour force, which are rising steeply under this Government. Those are met wholly by the state. It is, disproportionately, small employers who fail to train their staff adequately or at all.

The hon. Member for Runnymede and Weybridge referred to the trend of those in work receiving benefits. I note the Opposition's U-turn on House of Lords reform. Do I now detect an implied U-turn on the minimum wage and that the hon. Gentleman is asking for a higher minimum wage instead of benefits? Conversely, perhaps he will say what benefits he thinks ought to be cut for those in work who are receiving a lot more benefits under a Labour Government.

The hon. Gentleman mentioned the balance of the Bill's benefits. It contains benefits for employers, as well as for society, over paternity leave and adoption leave. Again, is the hon. Gentleman now performing a U-turn against the U-turn of the Opposition on the working time directive and paid holidays for employees, which benefit employers as well as society?

Mr. Hammond: The hon. Gentleman is not intervening but launching a very interesting and wholly new debate. I would be delighted to have it with him, but I suspect that you would not encourage me to do that right now, Mr. Benton.

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Mr. Prisk: Does my hon. Friend agree that it is a shame that the hon. Member for Wolverhampton, South-West (Rob Marris) has chosen to launch an attack on all small businesses in terms of education and training? He said that small businesses—he did not say ''some'' small businesses—are the ones that fail to train. I think that that is regrettable. Many small businesses are extremely good and at the forefront of training.

Rob Marris: On a point of order, Mr. Benton. I used the word ''disproportionately''.

The Chairman: That is not a point of order.

Mr. Hammond: I thank my hon. Friend for his intervention. I think that the hon. Member for Wolverhampton, South-West did say ''disproportionately'', but he did not say ''some''. I think that he applied his remarks to all small business, although I am sure that on reflection he would not want to suggest that all small businesses disproportionately under-perform in training.

Rob Marris: I did not mean to imply in any way that all small businesses fail to train, which is why I used the word ''disproportionately.''

Mr. Hammond: I am grateful to the hon. Gentleman for clarifying that matter.

This is an extremely interesting area. The hon. Gentleman has tried to put his comments to me in the form of a series of man-traps, asking whether I would acknowledge wanting to do a U-turn on the minimum wage and the working time directive.

Rob Marris: Answer.

Mr. Hammond: The answer is that the world is not as simple as the hon. Gentleman would like to make it, but I will give him my personal view. It is questionable whether we are heading in the right direction in creating a society where we have relatively high taxes and high percentages of people in work or on pensions who must have some form of means-tested benefits to live properly. We should not aspire to having 50 per cent. of people in work drawing benefits, but to create a modern and dynamic economy that delivers a labour market in which employers can earn good profits so that employees, exploiting the tightness of the labour market, can earn good wages that enable them to live comfortably without needing in-work benefits. That is my picture of the ideal society that I would like to live in. I am sure that, on reflection, every member of the Committee would have the same aspiration, but I fear that progress down the route of in-work benefits might not encourage us—

The Chairman: Order. I do not wish to intervene unnecessarily, but it would be serve a greater purpose if we got back to amendment No. 129.

Mr. Hammond: You are absolutely right, Mr. Benton. I apologise for having been tempted by the hon. Member for Wolverhampton, South-West down that course. Perhaps in the Smoking Room at 10.30 one evening we might more appropriately pursue that interesting debate, but I shall seek to withdraw the amendment.

Mr. Ian Pearson (Dudley, South): Oh yes.

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Mr. Hammond: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Hammond: I beg to move amendment No. 127, in page 8, line 13, leave out from 'at' to end of line 15 and insert

    'the lower of—

    (a) a weekly rate equivalent to 90% of the person's average weekly earnings; and

    (b) a weekly rate of Statutory Paternity Pay to be prescribed in regulations.'.

The Chairman: With this we may take the following amendments:

No. 147, in page 8, line 45 at end insert—

    '(9) In this section, ''average weekly earnings'' means the average weekly amount (as determined in accordance with regulations) of specified payments which—

    (a) were made to him or for his benefit as an employed earner, or

    (b) are (in accordance with regulations) to be treated as made to him or for his benefit as a self-employed earner,

    during the specified period.'.

No. 138, in page 11, line 11, leave out 'normal' and insert 'average'.

Mr. Hammond: The Government Whip said yes with some enthusiasm the question that the last amendment be withdrawn, Mr. Benton. It was indeed the hon. Member for Dudley, North—

Mr. Pearson: South.

Mr. Hammond: I beg the hon. Gentleman's pardon. I am sure that that is much the better side of town.

I thought that the hon. Member for Dudley, South (Mr. Pearson) employed a slightly crowing tone of voice in his final remarks to the Committee before Christmas, when he observed that, notwithstanding Opposition Members' objections to the timetable motion, we had reached the guillotine point just before the Committee rose for the Christmas recess. I make it abundantly clear to the hon. Gentleman that that was no coincidence, but the result of incredible self-discipline and some self-sacrifice on the part of the Opposition, and especially my hon. Friends, whom the hon. Member for Doncaster, North (Mr. Hughes) rather unfairly chastised last Thursday for not having played a larger part in the debate. I know that they would like to have made much greater contributions to this debate, but I have had to ask them to exercise restraint in the light of the extraordinarily tight programme motion that the Government have imposed on the Committee's deliberations.

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