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Baroness Walmsley: My Lords, we may very well do so. I thank the Minister for his reply, and I thank all other contributors to the debate. Any employer who does not know that his employee is about to become a father is a bit of a disgrace—at least at some level in line management. Therefore, the notice period in a way is academic when it comes to the employer knowing that he or she must plan for some leave. If four weeks is enough notice for a change in the date, it certainly should be enough to allow the employer to plan for the original notice period. The Minister is very insistent on the issue of consistency, and he seems to think that the poor employer has such a small brain that he can keep only one notice period in his head at any one time. In that case, why did the Government not make the notice period for additional paternity leave 15 weeks as well? Why did they choose eight weeks?

Lord McKenzie of Luton: My Lords, I thought that I touched on this. The eight weeks is aligned with the notice period that a mother is required to give of her return to work. There is symmetry in the arrangements from that point of view.

Baroness Walmsley: My Lords, I thank the Minister for that reply. I am not totally satisfied by it, but it is incumbent on me to read Hansard and to further consider his answers before deciding whether to test the opinion of the House; I will not do so today. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 [Annual leave]:

Baroness Miller of Hendon moved Amendment No. 13:

"( ) may not provide for the inclusion of regular public bank holidays unless not more than two are phased in any one year over a period of four years or over such longer period as the Secretary of State may determine;"

The noble Baroness said: My Lords, I should like to speak to Amendments Nos. 13 and 14 together. Both relate to the phasing-in of the Government's proposal to make the eight days of bank holiday enjoyed in England and Wales paid holidays, thereby adding a
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week and a half to the existing four weeks of paid leave to which every employee is currently entitled. We certainly do not oppose this concept, which is a Government manifesto commitment. However, adding an extra 40 per cent to the entitlement to paid leave is undoubtedly a big bill to expect commerce to swallow in one gulp. It would be particularly difficult for small and very small businesses.

As the CBI pointed out to the Government, commerce and industry need time to absorb the extra cost and overhead in medium-term business plans. The Minister promised to consider phasing in the additional leave when they consult on implementation. He said that consultation would take place shortly. How much consultation is really needed among interested parties? We already know the CBI's views. It is unlikely that other employers will insist that they take the eight days all in one go. We can assume that it is more likely than not that the unions will want the benefit sooner rather than later. Perhaps the Minister could write to me later to say how many people have been consulted in the past seven weeks and with what result, and who is still left to reply to the consultation.

6.45 pm

I regret to say that I cannot accept the Minister's argument that phasing,

With the greatest respect to the noble Lord, the administrative inconvenience of adjusting to and paying an extra eight days' wages over four years is more than outweighed by spreading the additional overhead rather than having to pay it in one big lump. In reality, how difficult will it be for even the smallest corner shop or market trader to understand that in year one, Christmas day and Easter Monday have to be paid for, in the next year it is the May and August bank holidays, and so on? It could easily be worked out. That is my point.

I was suspicious in Committee that the Government were far from keen to bring in the measure in stages. They promised the trade unions in the so-called Warwick agreement that it would be a measure for this Parliament. However, I am now heartened—slightly heartened—by the statement in the government paper Success at Work, which quietly crept out last month, in which they said:

That statement provides two loopholes, which is why I am only slightly heartened by it. First, it refers to how the changes "might be phased in" and, secondly, it makes such phasing in subject to the Government's consultation—I have already commented on that.

At this point we do not have an assurance that, having passed the Bill, the Government will not decide not to phase in the additional week and a half paid holiday. Even accepting the amendment, the Government will be fulfilling their pledge still to meet the commitment in the theoretical lifetime of this
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Parliament. In calling for the measure to be phased in over that four-year period, we on this side are not departing from the Salisbury convention about respecting manifesto pledges. The Government can consider that amendment separately, and I sincerely hope that they will do so.

Amendment No. 14 is intended simply to concentrate the Government's mind and get them to decide when the extra days' paid holiday will come into effect—whether it is this year, next year, or whenever. It is a sunset clause to terminate the provision about the eight extra days' paid holiday if the Government do not legislate by 31 December 2007. That gives them plenty of time to sort out the matter.

I have already commented on the length of what I should have thought was a relatively simple question to comparatively few consultees. I have provided what I believe is a generous period—well over a year and a half—for the Government to decide whether they will bring it in all in one go or phase it in. I would be satisfied with a final decision on when the measure is to come into force and a firm timetable. The Government may decide that they must continue with the consultation, in response to my first amendment, but my second amendment is really easy, as they ought to be able to commit themselves to something happening within the next year and a half. If they cannot do that, it makes the whole thing rather difficult. I beg to move.

Baroness Walmsley: My Lords, I am convinced by the appropriateness and adequateness of the rollout period proposed by the Government, and I am attracted by the simplicity of the arrangements. Therefore, I regret that I cannot support the amendment.

Lord McKenzie of Luton: My Lords, I am conscious that quite a lot of our debate on the Bill has involved the noble Baroness pressing matters on the Government, and the response being that we are in the middle of a consultation or are about to undertake a consultation that we must see through. As anticipated, that will be the tenor of the response to these amendments.

Amendment No. 13 would require that the additional leave entitlement is phased in over a period. Such a phased introduction would give a longer period for business—particularly small businesses—to adjust to the new arrangements; it would spread any additional cost over a longer period, and the amendment reflects the position of the CBI.

I think that it is true to say that only the CBI has called for four phases of the introduction. Other stakeholders who will be affected—small businesses in particular—may have a different view as to the phasing. As the Government have already stated in their recent publication Success at Work: Protecting Vulnerable Workers, Supporting Good Employers, we
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will consider phasing in the additional leave entitlement. We hope to consult over the summer on this and the other issues on how to implement the annual leave provisions in the Bill. We should not pre-judge the outcome of that consultation, as this amendment seeks to do.

The amendment suggests a specific pattern of phasing in the additional leave—two additional days per year over a four-year period. That is just one possible pattern that should be considered, but it would place a significant burden on employers by changing the rules every year for four years. I will hang on to that point, despite what the noble Baroness said when moving her amendment. The outcome that the noble Baroness seeks to achieve—allowing time for business to adjust and to spread any cost of this measure—may be achievable in a less burdensome and more straightforward manner. Before we decide whether the additional leave should be phased in, and over what period, we should consult those affected—both staff and businesses—on what would be most appropriate.

Amendment No. 14 would place three requirements on any regulations made under the powers in Clause 13. First, it would appear that any regulations must specifically include bank holidays if the powers under Clause 13 are to be preserved beyond the end of 2007. However, there may be more appropriate ways of achieving our intent; for example, by making paid leave equivalent to bank holidays and additional to the annual holiday entitlement. The reference specifically to bank holidays could then be unfortunate.

The second requirement is that the inclusion of bank holidays should be phased in. As I said when discussing the previous amendment, we will consider phasing in any additional leave, but should not pre-judge the outcome of the forthcoming consultation that will include whether the introduction of any such leave should be phased and, if so, over what period.

The third requirement is that both Houses must approve any regulations made under Clause 13 by the end of next year. It is certainly our intention to make the best possible progress on the annual leave measure. However, the issues are complex, not least because of the variety and complexity of working patterns today. It may be that the full and extensive consultation that we are committed to throws up further issues that will require careful consideration and further consultation. I would not wish to tie our hands to a definitive timescale at this early stage in the process, and I am sure that the noble Baroness would not want us to commit to a timetable at this stage that will cause problems for both Houses later on.

For these reasons, we cannot accept the requirements that this amendment would place on the Government, and I ask the noble Baroness not to press either amendment.

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