Employment Bill

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Mr. Hammond: I am grateful to the Minister for clarifying the use of ''normal''. It makes sense to ensure that certain payments could be excluded where they would distort the figure. However, if a payment was made to a person annually, but was routinely regarded as part of their total remuneration, it might be excluded altogether. That bothers me. It would obviously be appropriate to exclude it from falling fully within the week in which it was paid, but it would not be appropriate to exclude it entirely in calculating remuneration. For example, if somebody received £1,000 as a Christmas bonus, it would not be sensible to include that figure in calculating normal pay over the eight weeks that included Christmas, but it would be sensible to divide it by 52 for each relevant week.

Alan Johnson: These matters are complex. As I understand it, the major aspect that is regularly taken into account is arrears of pay. For example, if a pay settlement was made a year after the pay date and one payment to cover the arrears was made in a particular eight-week period, that would distort the whole calculation. Such factors are taken into account when the calculations are made.

Mr. Hammond: I am grateful to the Minister. His explanation of why ''normal'' is used is perfectly acceptable.

On amendment No. 127, I am grateful for his assurance—in so far as he can give it, because any Minister can speak only for the present incumbents at his Department—that statutory paternity pay will be paid at the same rate as statutory maternity pay.

On amendment No. 147, I must confess that I did not draft all the words myself. I lifted the phrase

    ''to be treated as made to him or for his benefit as a self-employed earner''

but for the life of me I cannot remember where from. I am pretty sure that it comes from the Social Security Contributions and Benefits Act 1992, but I cannot find the right page. I was not sure how the phrase should be

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interpreted, and that part of the amendment was intended to probe the Minister on the status of self-employed people.

The Minister has effectively told the Committee that it is tough luck if someone is self-employed and therefore pays lower national insurance contributions: that person falls outside the scheme, although precisely the same argument applies to those who earn below the lower earnings limit. We had an extensive debate on that last week, instigated by the hon. Member for Doncaster, North. The consensus, which the Minister was quite prepared to accept, was that for the sake of equity someone should not be excluded from the benefit just because they did not pay the contribution. He undertook to ensure that the system would operate so that although such people do not formally receive statutory paternity pay, they will get at least equivalent benefit compensation.

Can the Minister give a similar assurance in respect of self-employed earners, so that if their earnings are such that they do not pay the employee's national insurance contribution, they will not be disadvantaged simply for that reason? People earning below the lower earnings limit are a specific group addressed by the amendments discussed last week by the hon. Member for Doncaster, North. People who are self-employed and pay self-employed contributions are another specific group, and I ask the Minister to address the equity of the situation regarding those people, some of whom are extremely low earners.

Alan Johnson: The hon. Gentleman mentions the self-employed. It was this Government, not the previous one, that extended the right to maternity allowance to self-employed women. His Government did not do that. We examined the position of those women and, on the basis of health and safety problems, which mean that a woman has to have time off work to give birth to a child, we introduced a provision for maternity allowance.

I cannot see that the same argument relates to the hon. Gentleman's points. Of course we recognise that self-employed men will want to spend time with newborn or adopted children, but I do not see a role for the state in facilitating that for the self-employed. We are dealing with an Employment Bill, and the relationship throughout it is between the employer and the employee. I cannot immediately see any need to take action on the hon. Gentleman's point in the context of the points made by my hon. Friend the Member for Doncaster, North.

Mr. Hammond: The Minister said that we are dealing throughout with the relationship between employers and employees. On several occasions, we have discussed whether that definition might change to ''workers'' in future. If he were minded, as a result of the review being conducted by his right hon. Friend the Secretary of State, to change ''employee'' to ''worker'', would the self-employed taxi driver, for example, be embraced in the Bill's scope?

Alan Johnson: I shall not answer that hypothetical question. The coming review will take up some of the points made on that by the hon. Member for Hertford and Stortford in his ten-minute Bill, but I will not

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pre-empt it. Of course, self-employed men will be entitled to claim the working families tax credit in such situations. We think that self-employed men will be in control of the time taken for such things. In terms of remuneration, we think that the working families tax credit provides a better answer than dealing with that situation through this Bill.

11.30 am

Mr. Hammond: It may well be that the working families tax credit is a more effective tool to deliver the same end, but I have not heard from the Minister the assurance that I sought. Two people on the same income, one of whom is an employee falling below the lower earnings limit and the other self-employed, should not be treated differently? I am indifferent about the mechanism that gets them there.

There is a perception, rightly or wrongly, that the Government treat the self-employed as an underclass, not to be brought into the circle of benefits and support that others enjoy, notwithstanding what the Minister has said about maternity allowance. I thought it interesting that although he referred last Thursday to considering an equivalent to maternity allowance for men earning below the lower earnings limit, he has made no such comments about the self-employed. I will be disappointed if he cannot make the simple statement that a person earning below the lower earnings limit for employees, whether he be self-employed or employed, will be treated in the same way as regards state support.

I do not accept what the Minister said about the state having nothing to do with supporting self-employed people who want time off around the birth of a child. If we agree that the benefits of paternity leave are benefits to society and we acknowledge, as we did last Thursday, that the accrued benefits will be greater to low-income families and those at the lower end of the economic scale, it is wrong to say that the state should support families in which the father is an employee but not those in which the father is self-employed. Such an assertion implies the fallacious assumption, which underlies much Government thinking, that the self-employed are all well off and probably tax-avoiders.

Alan Johnson indicated dissent.

Mr. Hammond: That seems to be the underlying premise of much Government thinking. Many of the self-employed have low incomes and earn less than the people whom they employ. It is not right for a Minister to make a statement about the Government not seeing themselves as responsible for delivering support to that group, but accepting responsibility for delivering it to employees.

Alan Johnson: Those comments about Government perceptions of the self-employed are outrageous. I apologise for dwelling on this, but I have already pointed out that the Conservatives did nothing during their 18 years in Government to address the position of self-employed women who had to take time off work to give birth, whereas we extended maternity allowance to cover that group. I said that, of course, self-employed men will want time off with a newly born or adopted child, but I do not see a role for the

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state in facilitating that. The self-employed person either can or cannot spend time with the child.

Norman Lamb: I am not sure of the Minister's logic. In many debates we have recognised the importance of treating paternity leave the same as maternity leave by giving basic core rights to parents. The Minister rightly explained the extension of benefits to self-employed women to allow them to take effective maternity leave, and I fully support that. To follow that principle, surely we should enable and encourage self-employed men to have paid time off, as we do for women.

Alan Johnson: With women, we do not encourage it, we require it. They have to take between two and four weeks off to give birth to a child. The charge that we care nothing for the self-employed and have done nothing for them does not stick. Child birth is a significant area in which we have provided help and the Conservative Government did not.

Facilitating time off for self-employed people is a problem for those people; it is their business because they are self-employed. For employees, it is different. There is clear difference between facilitating time in those cases.

In relation to time off and remuneration, a woman must take time off and maternity allowance is therefore provided. In respect of paternity leave or adoption leave, no physical necessity requires a man take time off work and we are not making it a requirement; it is optional. The issue for the self-employed may be remuneration and I have suggested that the working families tax credit might be the answer. The cases are different and the hon. Gentleman is unfair in suggesting that because, on these practical points, we are unwilling to treat self-employed people in the same way as everyone else, we are implying that they are an underclass. That is a ridiculous argument against a Government that have done something practical for self-employed women in such circumstances.

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