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Standing Committee Debates

Draft Adoption and Children Act 2002 (Consequential Amendment to Statutory Adoption Pay) Order 2006

The Committee consisted of the following Members:

Chairman: Mr. David Wilshire
Atkins, Charlotte (Staffordshire, Moorlands) (Lab)
Blunt, Mr. Crispin (Reigate) (Con)
Burrowes, Mr. David (Enfield, Southgate) (Con)
Burt, Lorely (Solihull) (LD)
Clark, Greg (Tunbridge Wells) (Con)
Coffey, Ann (Stockport) (Lab)
Davey, Mr. Edward (Kingston and Surbiton) (LD)
Fitzpatrick, Jim (Parliamentary Under-Secretary of State for Trade and Industry)
Hepburn, Mr. Stephen (Jarrow) (Lab)
Jones, Mr. Kevan (North Durham) (Lab)
Kirkbride, Miss Julie (Bromsgrove) (Con)
Laing, Mrs. Eleanor (Epping Forest) (Con)
McCabe, Steve (Birmingham, Hall Green) (Lab)
McDonnell, John (Hayes and Harlington) (Lab)
Milburn, Mr. Alan (Darlington) (Lab)
Prosser, Gwyn (Dover) (Lab)
Wyatt, Derek (Sittingbourne and Sheppey) (Lab)
Glenn McKee, Committee Clerk
† attended the Committee

First Standing Committeeon Delegated Legislation

Monday 17 July 2006

[Mr. David Wilshire in the Chair]

Draft Adoption and Children Act 2002 (Consequential Amendment to Statutory Adoption Pay) Order 2006

4.30 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): I beg to move,
That the Committee has considered the draft Adoption and Children Act 2002 (Consequential Amendment to Statutory Adoption Pay) Order 2006.
The Chairman: With this it will be convenient to consider the draft Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2006.
Jim Fitzpatrick: It is a pleasure to see you in the Chair, Mr. Wilshire.
Following the Work and Families Act 2006 receiving Royal Assent last month, the regulations deliver on a number of the Government’s commitments set out in the pre-Budget report of 2004 and in the Government response to the 2005 work and families consultation. I am delighted to be able to discuss the regulations with hon. Members here today, a number of whom playeda significant part in the Bill’s progress through Parliament and who made many valuable and helpful interventions during its passage.
Before turning to the detail of the regulations, I shall say a few words about the work and families legislation—the Act and consequential regulations, including these. It is a significant package of legislation, which not only will give additional support to working families, but can enhance Britain’s economic success. Families today face real challenges in balancing their home and work life. Given parents’ desire to give their children the best start in life, coupled with the demands of an increasingly competitive economy, many of them struggle to balance their work and caring responsibilities. Also, as time goes by, an increasing number of men and women are likely to want to take time out of the labour market to care for children or elderly relatives or both.
At the same time, every business knows that, to succeed, it must find, develop and keep the best people possible. Many employers now recognise that helping employees to strike the right balance between work and family life can enhance their business performance, too. It gives them access to a wider pool of talent from which to recruit, and the evidence shows that a healthy work-life balance reduces staff turnover, raises morale and reduces absenteeism. The regulations respond to those changing patterns of employment and ensure that parents and adopters have genuine choices about how they balance work and family life.
The Government’s record on supporting working families was a good one, even before the new legislation. Since 1997, we have created more than 1 million additional child care places, guaranteed all three and four-year-olds a free part-time nursery place and improved financial support through increased child benefit and working tax credits. Working parents have benefited from improved maternity leave and pay, new rights to paternity and adoption leave and the right to request flexible working.
The regulations will deliver a number of measures for working families and their employers. They are the product of close consultation with a wide variety of interested parties, including parents’ groups, trade unions, businesses and their representative organisations and individuals. They have received a good measure of support from hon. Members on both sides of the House and from stakeholders more generally.
As well as a formal consultation launched in February last year, we have had and continue to have discussions with key players. We worked with an advisory group of human resource experts set up to consider how we could introduce these changes while easing the administration for employers. We were clear from the start that we wanted to establish a framework of rights and responsibilities for employers and employees, in line with the Government’s better regulation agenda. Some of the regulations derive from powers in the Work and Families Act 2006; others depend on prior primary legislation.
The regulations are due to come into force in October 2006, given our commitment to common commencement dates for new employment legislation, and will apply to parents if the expected week of childbirth or placement for adoption is on or after 1 April 2007.
The first main effect of the regulations is to enable all pregnant employees to benefit from up to a full year’s maternity leave. Under the current rules, all pregnant employees are entitled to 26 weeks’ ordinary maternity leave, and most to a further 26 weeks’ additional maternity leave. About 20,000 women a year, however, have not worked for their employer for long enough to qualify for the extra six months’ leave.
If the qualifying requirement for the second six months of maternity leave were to remain unchanged when pay is extended to nine months in April 2007, those women would be entitled to the extended pay, but not the leave that would allow them to take it. The regulations therefore remove the qualifying criteria for additional maternity leave, so that all women will be able to take up to 52 weeks, if they so wish, and to make use of the 39 weeks of maternity allowance.
The extension of maternity adoption pay from 26 to 39 weeks will be done via maternity and adoption pay regulations, which are subject to negative resolution, and will be laid before the House shortly. The likely effect of those measures will be that more employees will choose to spend longer periods away from work on maternity or adoption leave.
Although that additional flexibility will obviously be of huge benefit to working families, we recognise correspondingly that employers will need to manage those longer periods of time away from the workplace. The regulations therefore introduce a number of positive measures for employers. Before 2003, a woman could give as little as 21 days notice to her employer before starting her maternity leave. Employers told us that that was too little and that it caused difficulties when arranging and managing cover, so we extended the notice period to 15 weeks before the baby is due.
In the same way, during last year’s consultation on working families, we heard from employers that the 28 days’ notice that an employee needed to give when changing her date of return from maternity or adoption leave was simply not enough to allow them to plan ahead properly, particularly given the extension to the pay period that I mentioned a few moments ago. The regulations therefore extend the period of notice that the employee must give from 28 days to eight weeks, if she wishes to return to work earlier or later than previously agreed.
Research shows that the more planning employees do before leave, and the more support that they receive in the workplace, the more likely they are to return to work at the end of that leave.
Greg Clark (Tunbridge Wells) (Con): We all know that babies can come unexpectedly and prematurely. Do the regulations provide for such eventualities?
Jim Fitzpatrick: Yes. The extension of the leave means that mothers will have more time in which to accommodate an early or late arrival. The flexibility that we have incorporated into the general request for leave should be able to deal with that—most employers are accommodating in that regard.
During the consultation, we heard that some employers were sometimes unable to contact employees on maternity leave and that a stronger framework was needed to support communication between parents and their employers during those periods. In response to that, the regulations introduce the concept of “keeping in touch” days, which might well deal with the point that the hon. Gentleman raised.
Such days will allow employers and employees to agree that a certain amount of work—up to 10 days’ work—may be done under the contract of service during maternity leave. The corresponding pay regulations will also provide that up to 10 of those days may be worked without the employee losing a week’s statutory maternity pay, as she would do under the current rules.
Those “keeping in touch” days will of course be entirely voluntary and may only take place by mutual agreement. Essentially, that will be a permissive measure allowing employers and employees to arrive at their own decisions about whether “keeping in touch” days are for them and, if so, what they would be used for. During consultation, we heard that “keeping in touch” days are likely to be of particular use for things such as training events and important annual conferences.
We appreciate that “keeping in touch” days will not be for everyone. In many cases, employers and employees will wish simply to make contact with one and other, without the employee actually doing any work—for example, to talk about plans for returning to work, including, where appropriate, changing work patterns, or simply for an update on developments at work during the time away. For that reason, the regulations allow that type of reasonable conduct during the maternity leave to continue—indeed, the Government encourage it.
Legislation is only one way of approaching that matter, of course, and we are committed to providing clear and helpful guidance to accompany the new legislation when it comes into force, and have accepted the Equal Opportunities Commission’s recommendation that we produce a written statement on maternity rights and responsibilities for employers and employees. Further measures to support employers, particularly with regard to the administration of statutory maternity and adoption pay, will be delivered by the pay regulations to which I referred.
The regulations will remove the small employers’ exemption, clarifying the rules on the right of return after additional maternity leave, so that it is clear that a woman cannot be selected for redundancy or dismissed—regardless of the size of the organisation—simply because she is pregnant or on maternity leave. As I said, the measures will directly benefit employees; they will also benefit business and the labour market as a whole.
I turn briefly to the other statutory instrument, which makes a technical amendment to statutory adoption pay legislation, bringing the provisions for unmarried couples who jointly adopt a child into line with existing provisions for married couples and civil partners, and ensuring that only one member of an unmarried adopting couple can receive statutory adoption pay.
The order will apply to adopters whose child is expected to be placed with them for adoption on or after 1 October 2006. The number of adopters and employers affected is expected to be very small: about 4,000 adopters in total are eligible for statutory adoption pay each year, and only a very small number will be affected by the order. Although the order is not part of the working families package, we have laid it before the House, alongside the other regulations that we are discussing, to make more efficient use of time and ease implementation for that very small number of people and the employers who might be affected. I commend both the order and the regulations to the Committee.
4.41 pm
Mrs. Eleanor Laing (Epping Forest) (Con): On behalf of Conservative Members, I should like to say what a pleasure it is to serve under your chairmanship, Mr. Wilshire.
For the past year or so, we have been debating such legislation in the Chamber and during the very long consideration in Committee of the Work and Families Bill. All those who served on that Committee or took part in our debates in the House on that Bill will appreciate that there is a great deal of consensus across the political divide about what needs to be done.
“We have problems with the work-life balance” is one of the expressions of modern times, and it is indeed the case. The regulations, very reasonably, go some way towards helping that balance. As ever, I have reservations about imposing too many regulations and too much red tape on businesses—particularly small businesses, which find it more difficult to deal with the rules that come out of Whitehall; that is not surprising, given that they do not have large human resources departments to deal with them. Despite those reservations, I nevertheless agree in principle with most of what the Minister has said. We shall not oppose the regulations.
We Conservatives recognise that getting the most out of the work force is good for the economy and society as a whole, as well as for employers and employees. That does not mean making everyone work from nine till five from Monday to Friday; flexibility is key to allowing employees to balance their family duties, which include not only child care, but looking after elderly or sick relatives or disabled older children. We are not talking only about producing babies, although that is the main part of what we are considering this afternoon.
I welcome much of what is in the orders. Some hon. Members may not have heard what I often say in such debates, so I shall delight the Committee by saying it again: mothers with small children who also work in the general economy—earning money and contributing to the economy—effectively do two jobs. We must recognise that, not tell them that giving birth is some kind of added-on luxury. It is not; it is necessary. We need the next generation; we need small children to be properly cared for and nurtured, which involves improving the work-life balance.
Maternity leave is essential, but I continued to be concerned, throughout the passage of the Work and Families Act 2006, about the extra regulations being placed upon business. Again, I repeat my concerns and those of my right hon. and hon. Friends about businesses having to cope with regulation and red tape. We are concerned not only because of the harm that might be done to business, but—even more importantly—because if too many regulations are placed on businesses in connection with maternity leave and pay, they will simply find excuses not to employ women of child-bearing age. If that happens and the pendulum swings too far, all that we are trying to do will be negated. I am totally in favour of getting the right balance between the needs of the employer and the needs of the employee and the family; but if we go too far, businesses will not employ women and what we are trying to do will therefore backfire, and I do not want that to happen.
Having expressed my concerns, I find the proposals generally welcome, particularly regulation 8, which introduces longer periods of notice for expectant mothers and new mothers, to make the balance between employer and employee rather more reasonable. The Minister explained that well and I agree with everything that he said. Likewise, regulation 9 addresses what is colloquially known as the “keeping in touch” issue. The previous rules were too rigid. It was quite wrong for a woman on maternity leave not to be allowed to go in for training days, go to the staff Christmas party or keep in touch. It is vital that women who take maternity leave should keep in touch with what is happening in their workplace, so that when they are ready to return and when the employer is ready to welcome them back, they can return at the same level as before. That is a vital point, but it is often forgotten.
I picked up a statistic from the Minister for Women and Equality that is such a stunning statistic that I now repeat it more than she does. If all the women in the UK work force were given the flexibility to work and contribute at the level for which they had been trained and were capable, and were thereby to fulfil their duties to their families, rather than returning to work at a lower level after giving birth and therefore not earning or contributing as much, our gross domestic product would rise by 3 per cent., which is the equivalent of our annual trade with Germany. That is a huge amount. We are talking not about a marginal issue, but about an important social and economic issue.
Only when the economic necessity of helping women to balance childbirth and child care with their working lives is properly recognised will employers and business in general accept how important it is to understand maternity leave and be flexible about it. Women also have to produce the next generation. That is not an added luxury. Having a baby has sometimes brought the comment, “Well, if that’s what she chooses to do, she can’t expect to be treated in the same way when she comes back to work.” That is not fair or reasonable and does not consider the issue in the round.
In general, despite the reservations that I have mentioned many times and reiterated this afternoon about not making it too difficult for employers to employ women of child-bearing age, I welcome the regulations and congratulate the Minister on introducing them.
4.50 pm
Mr. Edward Davey (Kingston and Surbiton) (LD): I welcome you to the Chair, Mr. Wilshire. This is my first time serving under your chairmanship and I am sure that you will call me to order if I step out of line.
I welcome the regulations on behalf of the Liberal Democrats. We broadly believe that the Government have got the balance right between regulating business, particularly small business, and moving forward an important agenda. If anything, the Minister underplayed the importance of the measures in progress on family policy.
Often in the House, we wring our hands about the family, juvenile crime and, in the phrase used by the hon. Member for Epping Forest (Mrs. Laing), getting the work-life balance correct. These measures are practical, will help us to make progress and should be warmly welcomed. To use another phrase that is in common parlance at the moment, if we spent more time hugging babies we would probably need to hug hoodies less.
I particularly point to the significant proposal for “keeping in touch” days. When I studied labour economics at university, we examined the evidence of sex discrimination in the labour market and the analysis that had been done over the years to try to explain why, despite all the anti-discrimination legislation, women were still paid less than men in the workplace.
One of the main explanatory variables shown in econometric studies to explain the difference in salaries is that many women leave the workplace for several years to bring up children. We can naturally understand why that might be: those women are out of touch with the workplace and cannot take promotion opportunities that become available while they are on maternity leave bringing up young children.
While the regulations are a modest answer to the problem, they are also a very welcome step in the right direction. We must ensure, as the hon. Lady said, that when mothers return to the workplace they do not have to step down several rungs, but can go back at least to the rung they were on when they left, or, I would hope, even higher. This is an important initiative, and the Government are to be congratulated on it.
The hon. Lady rightly mentioned the need when passing regulations to consider their effect on business and whether they will present a barrier to doing business. She put in too many caveats; the balance has been wrong for too long and these proposals will shift it in the right way. Many progressive businesses realise the importance of that.
I can give an example of the problem from my own time in the workplace. Before being elected to this place, I worked in a small management consultancy firm with about 40 members of staff. The consultants were all upstairs and the support staff downstairs. A secretary became pregnant and the issue of her future role in the company arose. The company was managed in a fairly draconian way by the chief executive, and he gave the secretary her notice just before the second year was up—in those days, people got employment rights only after two years at work.
The chief executive gave the secretary her notice the month before she would have gained new rights. The effect was negative not only for that lady and her family, but for the whole firm. If that chief executive were to review that decision, he should regret its impact on the performance and productivity of the company. For quite a while, there was huge bad feeling among not just the support staff, but the consultants. We thought that we were working for a company that valued us only as work units, not as human beings. Our lives mattered only when we stepped over the threshold, but not outside the firm. As a result, the company performed badly for two or three months.
I hope that my point is clear. By embracing good employment practices, companies can be more productive and profitable and can help to get the work-life balance right for the affected employees, and indeed for all employees, because of the signals that are sent.
Further to the hon. Lady’s comments, I would be interested in hearing from the Minister a little more about the regulatory impact assessment that was done on the regulations. I have read it—it appears to be par for the course—but I am increasingly concerned about getting these assessments right not just so that we take measures that are right in principle, but so that we understand the true costs to the Government and, particularly, to businesses.
I do not disagree with the regulations, but I wonder whether we should not progressively be moving towards—leaping towards—independent assessment of the regulatory impact. That is not meant in any way to disparage the Department or the officials, but when the Department does the RIA itself, outside observers are likely to question whether the methodology is right and whether the impacts have been underestimated, or indeed overestimated. I hope the Minister will say something about that.
I wonder whether there is a case for the Government administering statutory maternity pay and so on for employers, particularly small employers. That would really get the balance right. It would say to employers, “We are going the extra mile and taking the cost burden of administration from you. Society says that these measures are right for our children and the future work force. We shall take the burden from you, but we ask you to adopt best practice.” That would be a step forward, and I hope the Minister indicates that he is at least willing to contemplate it.
4.57 pm
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