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Mrs. McGuire: Can the hon. Lady tell us what additional form-filling will be entailed when a member of staff of a small business elects not to work on a Sunday?
Mrs. Lait: I was referring to the impact of all the regulations, not necessarily form-filling, in this case as a response to Government. It is up to the employer whether to change the rostering or whether it is necessary to employ somebody else to cover the Sunday. The measure should not have any impact on the outgoings in terms of salary, but it could well have an impact in terms of claiming national insurance and claiming tax credit for a new employee—all the implications of hiring a new employee or re-rostering.
It is the sheer practicality of running a business that the measure will affect. It is so easy, when one is in Government, to say, "It will take only five minutes of somebody's time to do whatever the measure entails," but the five minutes add up. The CBI recently estimated that since 1997 the total impact of all the Government's new regulatory measures is costing the economy £20 billion a year—a sum that would buy an awful lot of schools, hospitals, teachers and all the better services that we all want. Meanwhile, businesses are paying less in tax, because they have to pay it out in a different way as a result of the costs of regulation.
That is one of the Opposition's concerns. Another is the cumulative effect. The regulatory impact assessment is a good idea, but it tends not to take into account the cumulative effect of all the various regulations. We need to examine closely the impact of the measure on businesses. I have cited a few of the potential problems that could arise when employees are given the choice whether to work on a Sunday or not.
I alluded earlier to the effect on small businesses of national insurance contributions, pension contributions and tax credits. Many of the employees in question may earn no more than the national minimum wage. One of the topics discussed briefly in Committee was the impact of the measure on people's pensions and national insurance. The Minister undertook to write to members of the Committee if she thought that there would be any impact on pensions. I have not seen any letter from her, but when I was thinking about the regulatory burden, one aspect that intrigued me was what would happen to part-time workers who decided, for all the right reasons, that they did not want to work on a Sunday. The employer is under no obligation to make up those hours for the purposes of contributions.
Many workers are on the cusp of paying national insurance. As everybody knows, national insurance kicks in at the rate of the personal tax allowance. A
worker may work, say, between 16 and 24 hours a week, on the national minimum wage. The current national minimum wage is £4.20 an hour. People are eligible for national insurance contributions if they earn £77 a week.According to my dodgy arithmetic, a person would have to work only 18 hours a week to be eligible for imputed national insurance payments, and 22 hours before they started paying national insurance. If they decided that they did not want to work on a Sunday, they would suddenly fall below national insurance contribution level, which would mean that they had a gap in their employment record. As we learned in the past few days, the Inland Revenue has forborne for the past five years from alerting people to that problem. Regardless of that, there is still the problem in principle of people having a broken national insurance contribution record. If they cannot make up those contributions in the future, their state pension is affected.
I think that I am right in saying that not only would that person's basic state pension be affected, but they would not be eligible for the state second pension, and companies with fewer than five employees have no obligation to offer a stakeholder pension. So we are speaking about a fair number of people on the cusp of having their pensions affected by the proposed change.
As I have said all along, I have no intention of pressing the matter to a Division, but we need to work through such examples much more closely in this place or in another place, or as we suggest, in a further regulatory impact assessment or further consultation.
Jim Sheridan (West Renfrewshire): I welcome the hon. Lady and her party's conversion to the introduction of a national minimum wage. May I remind her that both the Federation of Small Businesses and the CBI objected and actively campaigned against the introduction of a minimum wage?
Mrs. Lait: The hon. Gentleman may well remember that we said some time ago that we supported the national minimum wage, provided it was at a reasonable level. I am working through the existing situation so that hon. Members realise that there is a potential problem for the sort of people who we are all concerned should continue to work and be rewarded for it, and in their retirement should have access to a proper state pension. Without getting too technical, we all know that with the minimum income guarantee and the pension credit, their income will be made up anyway, but most people would prefer to feel that they had earned their state pension, rather than having it imputed to them. The change would cause them concern, and we need to make sure that they are aware of it.
Andrew Selous : The hon. Member for West Renfrewshire (Jim Sheridan) used the word "conversion" and my hon. Friend has also talked about conversion in relation to our party. Does she agree that, sadly, there seems to have been something of a conversion on the Labour Benches? Back in 1994, the Labour shadow Home Secretary was very much in favour of people not having to work on Sundays, but when I proposed a small and simple amendment to the Local Government Bill to prevent council employees
from being forced to work on a Saturday or a Sunday, it was robustly attacked by Ministers and not taken up. On this issue, the Government seem, sadly, to have undergone a conversion in the wrong direction.
Mrs. Lait: My hon. Friend would probably agree that a fair number of conversions on all sorts of subjects are taking place on the Government Benches, but, tempted as I am, we will not go into those, as I suspect that the Chair might become a touch twitched.
I have covered pensions exhaustively, but the effect of the measure on tax credits is a related problem. It will be no news to anyone in the Chamber that the introduction of tax credits has been less than smooth. I have received complaints from constituents who cannot get through on the phone and who have not yet been paid.
Mr. Peter Duncan (Galloway and Upper Nithsdale): It is chaos.
Mrs. Lait: As my hon. Friend says, the system is in chaos. Without going into detail about those current practical difficulties, there will be problems for people who decide not to work on a Sunday and cannot make up those hours, or for people whose income is reduced as, although they could make up the hours, they are not paid as much, because Sunday working may involve special deals, with double pay or time and a half. We should not, of course, interfere in their decisions, and I have no difficulty about that, but the employer could still be left with form-filling changes and the employee might have to reclaim tax credit and fill in the forms again.
I am sure that in the best of all possible worlds, which we all want to see, the chaos would merely be temporary, but those of us who listen to our constituents in our surgeries week after week know that the problems are not temporary—they tend to turn up regularly.
Mrs. McGuire indicated dissent.
Mrs. Lait: The hon. Lady may shake her head, but I have been a Member of Parliament for 10 years, representing two very different areas, and I can assure her that the same problems turn up week after week after week, because one or other state organisation cannot cope. For example, without reverting much to the subject of pensions, I heard this week from a constituent who has been trying to get her basic state pension for at least a year. She has received letters saying "We don't know your national insurance number" even though the number was printed at the top of the page, which leads one to reflect that the Inland Revenue's "temporary" problem with tax credits may not be solved in the short term.
There is a fluctuating situation as regards tax credits and there are implications for the measure.
Mr. Frank Roy (Motherwell and Wishaw): Did any of the constituents who visited the hon. Lady's surgery tell
her that they did not really want the tax credits and that they were a bad idea? If they did not, why did she vote against tax credits?
Mr. Deputy Speaker: Order. We do not need to explore that route further. Let us go back to the amendment proposed by the hon. Member for Beckenham (Mrs. Lait).
Mrs. Lait: I am happy to take your guidance, Mr. Deputy Speaker, but I hope that you will agree that the general issue of tax credits is relevant to the amendment, as well as to the regulatory burden and the need for further exploration of the implications of what may seem a simple change.
10.15 am
As we are not all instant experts on these subjects, I hope that the hon. Member for Greenock and Inverclyde will be able to reassure us that he will take those points into account. They could affect not only employers, but also organisations such as USDAW. They, too, may want to be consulted further on the implications of the proposals. I am sure that anybody involved in wealth creation will be extremely concerned about the direction that we are, unfortunately, taking. With the lack of competitiveness of our businesses, we are all reliant on the retail industry. Despite the point made, rightly, by my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) that people should not have to work on a Sunday unless they volunteer to do so, nobody would want further burdens to be placed on businesses, either in rural areas or in town or city centres, whose existence may be marginal.
The extra burdens produced by the change could precipitate a proprietor's desire to retire early and, suddenly, a crucial shop could close and we all know how much that can affect communities, wherever they are. Things could spiral down to a vision of dereliction and deprivation that none of us wants to see. As a law-making body, we should be wary of taking action that could drive businesses into closing down, with proprietors deciding to give up the game as it is no longer worth carrying on.
The Government have put huge layers of regulation on to businesses. The implication even of the few issues that I have raised is that further regulatory burdens will be laid on businesses. I hope that the Minister will indicate not only that there will be time for the transition arrangements to be worked through, but that the issues that I raised will be teased out so that everybody is aware of the implications and can adjust in plenty of time, if they need to do so.
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