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Mr. Mike Weir (Angus) (SNP): I welcome this opportunity to make a small contribution to this debate. As I said on Second Reading, I support the Bill because it introduces important new rights for workers. However, I also find myself strangely in agreement with much of what the hon. Member for Epping Forest (Mrs. Laing) has said about small businesses, although I should gently remind her that I ran a small business during the 1980s and 1990s, and regulation under the previous Conservative Government was every bit as bad as under any Labour Government. Whoever is in power, the amount of regulation for small businesses never seems to get any less.
My experience of running a small business leads me to support the new clause. I was surprised, however, to see that it stipulates the figure of 50 employees, as any business employing that many people would be considered relatively large in my neck of the woods these days, given the direction that the rural economy has taken over the past few years. Before I was elected to the House, I ran a small business as a country solicitor, and I recognise the hon. Lady's description of her father's frustration. The reality of running such a business is that employers do not do the VAT, the tax and the PAYE between the hours of 9 to 5 while they are in the office. That is when they try to make some money. They do those things in the evenings or at weekends. They go home at night and sit up until midnight, or often later, wrestling with these things. I was a solicitor but I am afraid I never truly got to grips with PAYE.
The Minister must realise that we are not just talking about tax regulation and maternity and paternity pay. Every business is subject to regulations from many other agencies as well. The cumulative effect of all these regulations, and the amount of time that anyone running a business has to spend dealing with them, will have an impact on that business. In my own case, there
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were masses of regulations that had built up from the Law Society of Scotland and the Financial Services Authority. Eventually, we decided that it was not worth the candle to go through all that, and that it would be better to junk our financial services business altogether because of the amount of regulation involved. There were good reasons for those regulations, because of what had happened in the financial services industry, but they became a huge burden for small businesses, which were doing their best to provide a service in small-town areas. The time spent dealing with those regulations impacts on a business, because it eats into the time that can be spent doing other things, such as spending time with the family.
A particular difficulty with these regulations could be the complexity of the interaction between the times when a mother and a father take their maternity and paternity leave. There could be difficulties with dealing with the statutory pay involved. That is another reason for considering ways of making it easier for small businesses to deal with these regulations, because they could get into difficulties if both parents were not working for the same employer. There would have to be interaction between the employers involved, as well as the Inland Revenue, and that could present problems. Transferring the obligation to the Revenue might provide a way round that, but there could still be an inherent difficulty if one party were with the Revenue and the other were not.
Mr. Sutcliffe: The hon. Gentleman is describing the reason why we want to consult on how to deal with the additional paternity leave. We shall do that, and we shall have discussions with small businesses about the issue. I am concerned that the hon. Gentleman seems to be talking about regulation in general, rather than the direct payments proposed in the Bill. Does he consider a benefit of £400,000, following an investment of £38 million, to represent value for money for the taxpayer?
Mr. Weir: If the figures are correct, it would not appear to do so. I must echo what the hon. Member for Epping Forest said earlier: the figures seem incredible for what I would have thought to be a relatively simple operation. The Minister says that I am not talking about the specific measures in the Bill, but we cannot divorce those measures from the impact that other regulations have on small businesses. They have a cumulative effect. This might only be a small regulation that we are passing—although it is an important one—but it will be yet another regulation on top of all the other regulations that businesses have to deal with.
I accept that there is a need for many of these regulations in the modern world. I do not subscribe to the theory that we should just throw all regulations out of the window. We have to have regulations, but they must be minimised, and we must do everything that we can in that regard when imposing new laws for the social good. The Bill will be for the social good of families, but we must also minimise its impact on business and on those families who run businesses. There could be other ways of achieving that. In my experience, many small businesses now outsource their PAYE and other tax
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work to local accountants because of the increasing complexity of the work involved. However, there is a cost involved in doing that. The more the accountant has to do, the greater the cost will be. Many small businesses are already struggling to make a living—there is a pretty hard business environment in some areas—and they would not be able to bear such costs.
I am inclined to support new clause 1. I appreciate that the Minister is going to consult on the provision, but this might not be the best way of dealing with the issue. We must find a way of minimising the impact on small business of these very good policies.
1.30 pm
Mr. Stewart Jackson: When speaking in this place, it is always a good rule of thumb to speak about something that one is vaguely acquainted with. That is a personal credo which is not always followed by other Members, but I hope to follow it today, as in a previous life I was a business adviser with Business Link. I well remember the days when I would trudge round Europe's largest industrial estate at Park Royal. As I would knock on the door and go into those very small micro-businesses, some with fewer than five staff and many with fewer than a dozen staff, the most dread words that I could say were, "I'm from the Government and I'm here to help your business."
That was rather unfair, and I take this opportunity to pay tribute to the sterling work done by Business Link. It does an excellent job. It is important to recognise the struggle that small businesses face every day to make ends meet. The points about cash flow made by the hon. Member for North Norfolk (Norman Lamb) and my hon. Friend the Member for Epping Forest (Mrs. Laing) are well made. Whether by the British Chambers of Commerce, the Institute of Directors or the CBI, much comment has been made about the speed and quantity of regulations coming from Government.
I should like to explain in a wider context why I support the Bill from a political as well as a personal point of view. To be slightly partisan, I resent the implication that the Labour party—the Government—has a monopoly on concern for working people and on care about work-life balance, that amorphous group of policies dealing with quality of life issues. That is not true. My party should not be pigeon-holed as a party that is not progressive, that is not modern, and that is unwilling to look at Britain as it is today, rather than as it was. I strongly support the views of my right hon. Friend the Member for Witney (Mr. Cameron) in that respect.
Similarly, I am not speaking today as a mouthpiece of big business. To me, big business has good parts and bad parts. The bad parts are supermarkets and banks, which are my own bugbear. But that is not free enterprise and competition. Free enterprise and competition is the invisible hand of Adam Smith, which my hon. Friend the Member for Epping Forest no doubt invoked when speaking about her father, a good Fife man.
We care about working families and we welcome the Bill because we think that in general it will be successful, it will make an impact and it will help with aspects such as bonding between parents, quality time, and nurturing and protecting family life. I say that not because I am some wishy-washy Liberal, although they are in the
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news this week, but because that is good, practical, economic common sense. I reiterate the comments of my hon. Friend the Member for Epping Forest that small business people have families too and they want quality time. If they have mortgaged their house or remortgaged their business and gone cap in hand to the bank, their right to have a family life is important too. We should do everything we can to mitigate the pressures on them.
I turn to the issue of paternity pay. In Committee the hon. Member for Burnley (Kitty Ussher) was offended by the fact that men are paid more than women and consequently that paternity pay was an issue. That is a fact of life. There are cultural issues involved in the non-take-up of paternity rights. Men are often at a higher level in the hierarchy and are better paid than women, and they perceive that their careers will be damaged if they take paternity pay and avail themselves of paternity rights.
I referred earlier to the dichotomy in the Government's position, and I sense a slight weakening in resolve on the Minister's part with regard to new clause 1. The Government are effectively saying, "We are going ahead with paternity rights. We want more men to have that work-life balance, but there are not many of them, so don't worry about it." If that is the case, the Government should consider new clause 1 with an open mind.
We should be careful about the amount and proximity of regulations coming through to small businesses. There is both anecdotal and empirical evidence suggesting that we should not inadvertently bring about discrimination. If a business is struggling at the margin, business people will look at the legislation coming through and make a judgment about the impact that it will have on them. If the future of the business is a matter of life or death, they may well decide that they do not want to employ a young woman of childbearing age or a younger man. That is discrimination. I make no excuse for it, but if the Government are not sensitive to that degree of regulation and the burden that it places on businesses, they will find that the people they most wish to help—young families, mums and dads who have to work to pay the mortgage and meet the costs—will be discriminated against.
I am concerned particularly about paternity rights because I am unsure about the figures. Are they based on social studies, demography or statistics compiled centrally by the Department of Trade and Industry? I am not clear how straightforward and transparent the figures are and what impact they will have on small and medium-sized enterprises. For instance, the indicative estimates of the cost of paternity pay are anywhere between 12 and 21 per cent. That is potentially an 80 per cent. overrun. For the right to request flexible hours, the indicative cost is anywhere between just under £30 million and £120 million, which is a pretty substantial difference. That is a concern to me. One might say flippantly that the figures could have been prepared by the architects of the Scottish Parliament, but I would not go that far.
The issue is balance, as my hon. Friend the Member for Epping Forest said. We must get the balance right. We all care about making sure that the economy is improved, that businesses grow, and that families are not put under stress to the extent that they disintegrate
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as a result of getting the work-life balance wrong. None of us wants that. Given that 97 per cent. of the UK's gross domestic product is generated by small businesses, many of which are micro-businesses and innovative businesses, we must not throw the baby out with the bathwater or crack the golden egg. No more similes.
I broadly support the Bill. My experience as a business adviser is that where they can, people who run businesses will do their best to comply with regulations if they think they are fair and if they think others are complying with them. If they think the regulations are unfair and that the Government are not listening to them or their representative organisations, they will avoid them, the scheme will not work, and ultimately the Government will not achieve their aims. With that, I give the Bill a broad welcome. I hope that when the Minister speaks later, he will address the concerns that I raised today.
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