Work and Families Bill

Public Bill Committee, 13 December 2005.

Work and Families Bill - Standing Committee A

Work and Families Bill

Hugh Bayley (Labour, City of York)

I remind the Committee that there is a money resolution in connection with the Bill. Copies are available in the Room. I should also like to remind Members that adequate notice should be given of amendments. As a general rule, I and my fellow Chairman do not intend to call starred amendments, including any which may be reached during an afternoon sitting of the Committee. I call on the Minister to move the programme motion.

Meg Munn (Labour, Sheffield, Heeley)

I beg to move,

That—

(1)during proceedings on the Work and Families Bill the Standing Committee shall (in addition to its first meeting at 10.30 a.m. on Tuesday 13th December) meet—

(a)at 4.00 p.m. on Tuesday 13th December;

(b)at 9.00 a.m. and 1.00 p.m. on Thursday 15th December

(c)at 9.00 a.m. and 2.00 p.m. on Tuesday 20th December

(2)the proceedings shall be taken in the following order; Clauses 1 to 11; Schedule 1; Clauses 12 to 15; Schedule 2; Clauses 16 to 20; new Clauses; new Schedules; remaining proceedings on the Bill;

(3)the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 p.m. on Tuesday 20th December.

Good morning, Mr. Bayley. I warmly welcome you to the Chair and am genuinely delighted that you will supervise this morning’s discussion. I also welcome all members of the Committee, and the Opposition spokespeople. It seems that only last week we were in another Committee elsewhere—which, indeed, we were.

Several of my hon. Friends warmly supported the Bill on Second Reading. I am grateful to them; several Opposition Members who are present also took part in that debate. There is wide support for the Bill from many organisations, including from business. I look forward to a constructive debate that allows the Committee to scrutinise the Bill thoroughly. Members of the Committee will have noticed that the programme motion contains no knives, and no doubt they will welcome that. That gives us flexibility to consider fully issues that deserve particular discussion, and to move more swiftly over issues of lesser significance. I commend the motion to the Committee

Mark Prisk (Conservative, Hertford and Stortford)

I am delighted that we are under your leadership, Mr. Bayley. I think this is the first time that I have been guided by you in the role of Chairman, and I look forward to that in the coming few days. I welcome both Ministers who are here today, and also my hon. Friend the Member for Epping Forest (Mrs. Laing), who understands these issues far better than I ever shall. I am delighted to be here in her support.

We have before us up to six potential sittings; I know how much Labour Members are looking forward to the sittings on Tuesday next, as are Opposition Members. We will, I am sure, have the opportunity here for a full and thorough scrutiny of the issues. As the Minister rightly mentioned, we share much of the Government’s view on the importance of the role of work and families. Indeed, we wish to ensure that the quality of the legislation before us is the best that we can manage. That is why we shall be asking questions to probe the Government’s intentions and aims. Without such scrutiny, we would be failing in our duty. I am sure that Labour Members will wish to participate in that process.

Therefore, on this occasion—and I do not often get the chance to say this—I welcome the fact no timetable instruments, or knives as they are colloquially known, have been put into this motion. One simple reason that Opposition Members raise concerns about such timetables is that they interfere with the quality of the scrutiny process. It means that we sometimes have to guess which amendment we need to focus on to deal with the big issues, and often forces us to leave out smaller issues. Those may be particularly important to our constituents, but we nevertheless have no time for them because we are racing to catch up with those amendments which are perhaps at the back end of a timetable, or knife. Thus it is especially welcome that the motion before us today does not include such knives. I hope that means we shall be able to tease out the details here. We certainly look forward to a thorough and positive exchange.

Norman Lamb (Liberal Democrat, North Norfolk)

May I also welcome you to the Chair, Mr. Bayley? It is a pleasure to serve under your chairmanship. I, too, welcome the two Ministers to this morning’s debate and, although he did not welcome me in his introductory remarks, I welcome the hon. Member for Hertford and Stortford (Mr. Prisk).

We support the Bill’s objectives. In many respects, it is an acknowledgment of the revolution that has occurred in the workplace from the days when it was dominated by men, who were the single breadwinners. The world has changed much since then when people worked full-time and were the sole breadwinners. There is an economic imperative for facilitating women remaining in employment, but in a way that also meets the needs of families and of children. There is equally a need to ensure that fathers are able to achieve a better work-life balance.

There are concerns about some of the Bill’s details. There is clearly a need, probably shared on all parts, to ensure that we avoid over-burdensome obligations, particularly on small employers. One of the amendments that I have tabled seeks a way of reducing the burden on them. We must be alert to that, because although is it right to ensure that mothers and fathers can achieve the better work-life balance that we are all striving for, we must recognise that when any employee takes time off work, it has an impact on the employer. The impact is greatest on small employers, and everything must be done to ease the burden on them.

Hugh Bayley (Labour, City of York)

Order. May I say to the hon. Gentleman that at this point in our proceedings we are discussing the programme motion? We will come to the wider questions of the Bill’s content as we discuss his amendments and those of other hon. Members.

Norman Lamb (Liberal Democrat, North Norfolk)

I am very grateful for that guidance, Mr. Bayley.

May I also briefly raise the concern that the Bill leaves an awful lot to regulations? Inevitably, there is a concern about that. The TUC, among others, has highlighted the vagueness of the Bill in that respect. In addition, there is nothing about the time scale for the introduction of regulations. The TUC also refers to the fact—

Hugh Bayley (Labour, City of York)

Order. I must say to the hon. Gentleman that we must leave questions about the content of the Bill and certainly the views of other organisations until we reach the debates on the content of the Bill. We are now discussing the programme motion and the timetable for considering the Bill.

Norman Lamb (Liberal Democrat, North Norfolk)

I thought that the Conservative spokesman made some general comments, and I was merely seeking to make general comments about the presentation of the Bill and the extent to which it relies on regulation. I take your guidance, Mr. Bayley, and I will not push you any further in this respect.

Clause 1 - Maternity pay period

Norman Lamb (Liberal Democrat, North Norfolk)

I beg to move amendment No. 10, in clause 1, page 1, line 7, after ‘weeks’, insert

‘; but a woman taking maternity leave who takes less than the maximum prescribed period is entitled to receive the same total amount of statutory maternity pay that she would have received had she taken the maximum prescribed period, paid so far as practicable by equal weekly instalments.” ’.

Hugh Bayley (Labour, City of York)

With this it will be convenient to discuss the following amendments: No. 11, in clause 2, page 1, line 11, after ‘weeks’, insert

‘; but a woman receiving statutory adoption pay who takes less than the maximum prescribed period is entitled to receive the same total amount of statutory adoption pay that she would have received had she taken the maximum prescribed period, paid so far as practicable by equal weekly instalments.”’.

No. 12, in clause 6, page 5, line 45, leave out ‘and’.

No. 13, in clause 6, page 5, line 48, at end insert

‘, and

(c)provide that a person receiving additional statutory paternity pay who takes less than the maximum prescribed period is entitled to receive the same total amount of additional statutory paternity pay that he would have received had he taken the maximum prescribed period, paid so far as practicable by equal weekly instalments.’.

No. 14, in clause 7, page 6, line 46, leave out ‘and’.

No. 15, in clause 7, page 7, line 3, at end insert

‘, and

(c)provide that a person receiving additional statutory adoption pay who takes less than the maximum prescribed period is entitled to receive the same total amount of additional statutory adoption pay that he would have received had he taken the maximum prescribed period, paid so far as practicable by equal weekly instalments.’.

Norman Lamb (Liberal Democrat, North Norfolk)

As I was saying, the Liberal Democrats very much support the increase in maternity leave proposed in the Bill. It seeks to increase the maximum period of maternity leave to one year. The indication is that that would be introduced by a phrased approach, by way of regulation. First, there would be an increase, by regulation, to nine months and then subsequently to a year by the end of this Parliament. That is a thoroughly sensible way of proceeding.

There is a problem with this new right, which, in a sense, relates to the level of pay. The level of pay for the bulk of the maternity leave is low: £106 at present. There is inevitably a risk that, for many people, it will be impossible to take the full period of maternity leave to which they will be entitled. It may be that there should be a long-term objective of raising that level of pay in a way that is achievable given overall Government expenditure.

In the meantime, however, it seems that it is worth trying to find ways of putting the power into the hands of the woman taking maternity leave to choose, if she wants, to take a shorter period of maternity leave than the maximum at a higher rate of weekly pay. In other words, every woman who takes maternity leave should be entitled to the full amount of maternity pay that she would receive under the period allowed by the Bill—ultimately, one year. However, if she chooses, she should be able to take it over a shorter period at a higher weekly rate. That follows the Swedish approach, introducing more flexibility and enabling the woman to choose how she will take the leave while ensuring that every woman is entitled to the maximum amount of maternity pay that can be provided for over the maternity pay period.

Some women might not take the full maternity period, but, if my amendment is accepted, they might take more than they would be able to take financially under the unamended Bill. The risk that we face is that the entitlement that the Bill provides will be meaningless for a group of women who cannot afford to take the full period at £106 per week. I appreciate that that figure will increase marginally year by year.

In my model, which introduces greater flexibility for the woman taking maternity leave, we may well see a situation in which a woman chooses to take nine months rather than a full year of maternity leave, but combines that with a request to the employer on returning for flexible working. In other words, we could envisage a phased return to the hours the woman chooses to work. Perhaps the woman could take nine months rather than a year, return on an agreed basis of flexible working to work two days a week and, if she is a full-time worker, increase that progressively until she is back full-time. In other words, it is about putting the power in the hands of the individual who is taking maternity leave.

I suspect that, under my proposal, the total bill for maternity pay that the Government would have to meet would be higher. In effect, we would be saying that every woman would be entitled to the full amount of statutory maternity pay, but that she might be able to take it over a shorter period. Will the Minister tell us whether a calculation has been done of the extra cost of the amendment? It would be a pity if it were rejected on cost grounds because the Government are facilitating women taking the full period of maternity leave. Therefore, in theory, they must support women being entitled to the full amount of statutory maternity pay. The reality under the Bill will be that not all women will be able to take that for economic and financial reasons.

Jim McGovern (Labour, Dundee West)

I think that I understand the hon. Gentleman’s point, but there is a danger associated with it. I assume that we agree that the purpose of maternity leave is to allow the mother to spend time with her new child, but does not this amendment provide an incentive for the mother to spend less time with her new child?

Norman Lamb (Liberal Democrat, North Norfolk)

I think that the opposite is the case. The power will be in the hands of the woman. Some women will be financially able to take the full amount of maternity leave, but Ministers must accept that the reality is that not all women can do that. Many women will have to take less than that because they cannot afford to be off work at such a rate of pay for the full one-year period.

This measure would mean that more women will be able to take more time off, and to choose how to do that. If we have a situation in which a proportion of women cannot afford to take a full year so they take significantly less than that, I am sure that the hon. Member for Dundee, West (Mr. McGovern) would agree that that is not good. However, if the mother is able to take nine months at a higher weekly rate than for the full year, and that facilitates her taking the nine months off, perhaps combined with flexible working when she returns to work—a phased return—that will be a good thing that ensures that women are able to take more time off than would otherwise be the case.

Sadiq Khan (Labour, Tooting)

To follow on from the point made by my hon. Friend the Member for Dundee, West, is there not a problem in that someone could take a very short period of time off for maternity leave in order to get back to work as soon as possible so as to get a “windfall” by receiving the contractual pay entitlement as well as statutory maternity pay for the period when they are entitled to that? That would encourage people to go back to work sooner, when the purpose of the Bill is to allow mothers to spend more time with their newborn child.

Norman Lamb (Liberal Democrat, North Norfolk)

The hon. Gentleman makes a good point, and I accept it completely. This is a probing amendment. It is designed to initiate a debate, so that we can discover whether there is a way of introducing greater flexibility and of giving more power to the woman taking the maternity leave, instead of the provisions being something of a straitjacket.

The principle behind my amendment is a strong one: more power should be given to the woman. If that were to happen, more safeguards might be needed to ensure that the entitlements apply for a defined period, so as to avoid the windfall that the hon. Gentleman refers to. However, I hope that we would all accept the principle that more power should be given to the woman to decide how to take that period of leave.

We should adopt the Swedish approach: there should be as much flexibility as possible and the woman should be given the power to decide. The amendment gives the woman the power to decide and helps more women to take more leave, and it does not in any way compromise her entitlement.

The other amendments follow on similar lines. Amendment No. 11 would ensure that the same principle was applied to adoption pay. Amendments Nos. 12 and 13 relate to statutory paternity leave and pay. The Government’s own assessment is that take-up of paternity leave will be very low. The regulatory impact assessment makes that very clear; I refer Members to pages 84 and 85 of the document. The prediction depends on whether the entitlement to additional paternity leave is based on 26 weeks’ service or 60 weeks’ service. If it is based on 60 weeks’ service, the Government’s own prediction is that 9,000 to 13,000 fathers will take advantage of the entitlement. That is a tiny proportion of the total. If there were a 60-week employment requirement, the total eligible for leave would be 380,000 and the total eligible for pay would be 238,000. The total anticipated to take the entitlement would be 9,000 to 13,000—as a percentage, that is tiny. We can make all sorts of grand statements about how the entitlement will transform the workplace, but let us be honest about its anticipated impact: that is tiny.

Mark Prisk (Conservative, Hertford and Stortford)

I understand what the hon. Gentleman has said, but conversely is there not a different danger? If the Government assume that the take-up will be less than they have said, the costs could be dramatically different from those presented to us as we have considered this legislation. In other words, if the 9,000 were to become 18,000, that would make a radical difference to the cost, although I am not sure that it would double it. Does the hon. Gentleman share my concern that an underestimation is involved, which could be to the detriment of small businesses in particular?

Norman Lamb (Liberal Democrat, North Norfolk)

I welcome the hon. Gentleman’s intervention; what he says may well be the case. We all need to be honest about the issue: do we believe in fathers taking paternity leave? I strongly believe in the right being introduced, but if the Government’s own estimate is that the take-up could be as low as 9,000, we shall not be introducing much of a right.

The danger is that the entitlement will be taken up only by those fathers who can afford to take time-off pay at that very low rate; it might become a middle-class entitlement and not one for people on lower earnings, who may have mortgage burdens and so on and simply not be able to afford to take the amount of leave provided for. If we are talking about trying to change the culture of the workplace and really ensuring that men are able to take time off and spend more time with their children during their early years, we have to do something effective to achieve that.

It seems much better to put the power in the hands of the father. I fully acknowledge the point made by the hon. Member for Tooting (Mr. Khan); adjustments may be needed to ensure that the allowance is not all taken as a windfall. However, surely it is better for a father to take, say, nine weeks off rather than the full entitlement, but at a rate of pay that ensures that he can do so. That is better than not taking it at all. That is the risk that we face, which was acknowledged by the Government in their regulatory impact assessment.

The case is strong. In principle, if we can put the power in the hands of fathers—perhaps with more safeguards to ensure that the entitlement is not taken as a windfall—and ensure that they are able to take advantage of the entitlement, that would be a good thing in changing the culture of the workplace and ensuring that men—and women, when they take maternity or adoption leave—take advantage of those rights. At the end of the day, that is what we all want.

Eleanor Laing (Conservative, Epping Forest)

To observe the proper conventions, I should say that it is a great pleasure to serve under your chairmanship, Mr. Bayley. I welcome both Ministers. The Minister with responsibility for women and equality and I have probably spent more time together during the past six weeks than either of us have spent with any family at any time, so some of what we say this morning is said with heartfelt understanding.

Having said that, I strongly welcome the fact that the Government are taking all the measures that we have been debating and discussing in the past few months, because we thoroughly support the intent to help everyone to achieve the work-life balance that is essential not only to individuals and families but to business and the economy. That is a general point, however, wide of what we are now discussing. I shall not try your patience on it now, Mr. Bayley.

On the precise matter of amendment No. 11 and the others in the group, and the general assertions made by the hon. Member for North Norfolk (Norman Lamb), we agree in principle with what he just said. There may be differences of detail and, as ever, I make a cautionary point about how much public money could be spent, always bearing in mind that everything that we discuss in passing the Bill must be balanced with other matters on which we would want to spend taxpayers’ money. Still, in principle, I totally support what the hon. Gentleman said.

The fact is that all families are different. It is wrong for the Government to prescribe exactly how a new mother and father and family should behave, exactly how an employee should behave immediately after the birth of a child, how a family should balance its resources between the mother and father or anyone else in the family who is involved in the child’s upbringing, and how all employers should deal with their employees.

Those matters require a degree of flexibility, because every family—every mother, father and child—and every employer is different, as is every employer-employee relationship. In particular, there is considerable variation between large employers with a human resources department and plenty of flexibility about replacing one employee with another temporarily and smaller employers that do not have the flexibility to allow that. Therefore, for the Government to prescribe precisely how maternity and paternity leave and pay should work is not the best approach. Everything that I say about maternity and paternity rights should of course apply also to adoption rights, as the hon. Member for North Norfolk said.

In particular, we previously proposed—and made it an important plank of our manifesto for the general election—that should a new mother, or, indeed, new father, wish to take maternity or paternity leave or pay, it should be possible for them to receive the amount that would have been paid over nine months in six months, or a period in between those two, as a way of providing the flexibility, choice and adaptability that would fit the rights to each family.

If the Government confer a right but it does not help a particular person or family at the relevant time, that is pointless. It might as well not be given if the family—or the employee or employer, or the child, father or mother—cannot benefit. Flexibility is the key factor in making those rights work. It is hard to imagine why the Government would argue against somebody taking the same amount of taxpayers’ money in maternity or paternity pay but taking it over a shorter period of time.

Jim McGovern (Labour, Dundee West)

When would the mother decide the date of her return to work? It seems to me that if she wanted an increased payment, she would have to say so prior to the birth of the baby? Following the birth, the assessment could change and she might decide that she would need a longer period.

Eleanor Laing (Conservative, Epping Forest)

I do not think that the woman would need to say so before the birth of the baby, although she might have to do so shortly after it.

Norman Lamb (Liberal Democrat, North Norfolk)

On that point, may I assist by way of referring to the amendment? I suggest that, so far as reasonably practicable, the payment is made in equal weekly instalments, but clearly we cannot prescribe beforehand exactly how long the woman would choose to be off. If there is a balance to be paid at the end, she would know that she would be entitled to it. That is the way that the amendment would work.

Eleanor Laing (Conservative, Epping Forest)

I thank the hon. Gentleman for clarifying exactly what his amendment says. As I said, I support his amendment in principle, but the detail will take further working out. It does not seem beyond the limits of practical administration that a new mother could, in the first few weeks after the baby’s birth, claim her maternity pay, taking it over the nine-month rate per week but that that could then be changed if she wished to shorten her period of maternity leave. Why not?

We all pay too much tax. We all, from time to time, might pay too much tax and then have the tax code changed to take account of that and pay less tax over the next year or receive a rebate. The Exchequer can surely manage to do a simple calculation of an amount that is due. When I think about it, that is a wild hope on my part, given the way in which tax credits are working. In my constituency alone it would take hundreds of man hours of Inland Revenue time to sort out the problems in the tax credit system.

Mr. Khanrose—

Hugh Bayley (Labour, City of York)

Order. I remind both hon. Members that we are debating the Work and Families Bill and not tax credits.

Eleanor Laing (Conservative, Epping Forest)

Yes.

Sadiq Khan (Labour, Tooting)

Has the hon. Lady not demonstrated the paradox in the argument of the hon. Member for North Norfolk? He is claiming that the problem with the paternity leave suggestion is that it will benefit middle-class fathers, yet the hon. Lady is saying that the problem with the maternity pay is that those who earn more than £106 a week will not benefit, because a small amount of money is involved. Does she not recognise that some people earn small sums of money and will benefit from the SMP being extended over a nine-month period, rather than it simply benefiting those affluent people in her constituency by way of a windfall? Will this provision not benefit those who need it the most?

Eleanor Laing (Conservative, Epping Forest)

I did not say anything of the sort, and I do not know where the hon. Gentleman got that from. I never mentioned £106. I would like to make that clear. He must be making an assumption about what a Conservative would say. I did not say anything remotely like what he said. This is extremely important. There is no reason why someone who wants to take nine months’ maternity leave cannot do so and take the amount of maternity pay that would then become due.

Sadiq Khan (Labour, Tooting)

It is called a “windfall”.

Eleanor Laing (Conservative, Epping Forest)

I never mentioned the word “windfall”.

Charles Walker (Conservative, Broxbourne)

Will my hon. Friend give way?

Eleanor Laing (Conservative, Epping Forest)

If my hon. Friend will forgive me, I will continue for a moment. The hon. Member for Tooting spoke from a sedentary position, and I have not given way to him. He is more than putting words into my mouth. I never used the word “windfall”. When did I say that?

Hugh Bayley (Labour, City of York)

The hon. Lady should continue. She has made it clear that she is not giving way.

Eleanor Laing (Conservative, Epping Forest)

I am not giving way to the hon. Member for Tooting, who seems to be making up what I have said. He is having hallucinations about what I am saying. I said that I see no reason why a woman who wishes to take maternity leave over nine months should not be able to do so. Of course, she might not wish to do so—we have to allow for different circumstances; every family, employment situation and child is different and it makes a huge difference if a mother has a healthy child who does all the things that small babies are meant to do and sleeps through the night at three months. That is all wonderful. I wish that my four-year-old had slept through the night last night, but that is neither here nor there.

How very different is the situation if a mother thinks that she is going to have a baby with whom there will be no problem, but it has even a small health problem. That changes the picture completely. Therefore, flexibility is very important. I see no reason why there should not be choice and flexibility if somebody wishes to take only six months away from work, whatever the reason. It might be because she or he does not feel the need to spend more than six months at home with the child because there are brilliantly competent grandparents to help or something along those lines, or it might be that the parent has a particular project or issue in the workplace that he or she wishes to deal with and therefore wishes to go back to work sooner; and why not?

Charles Walker (Conservative, Broxbourne)

Are we suggesting that there should be a default position? I can see hon. Members raising concerns about the fact that the total sum over a year is £5,512 and that a woman might decide to go back after two months and to receive £4,000 and that we would not want to encourage that. However, some flexibility would be good. Perhaps a default position of six or nine months would allay some of the concerns that have been expressed today.

Eleanor Laing (Conservative, Epping Forest)

My hon. Friend makes a good point. One of the problems is that we are dealing with generalities, not with the precise way in which this will be constructed. At a later point in the debate, I shall make a point about the need for very detailed regulations to be brought before the House. Flexibility and choice are what matter if families are to achieve a work-life balance. Every situation is different from every other, every family is different, every employer is different, and every child is different. Therefore, it is right to introduce choice and flexibility.

I should also say that every economic situation is different. For some people, because of their financial circumstances, basic maternity pay is sufficient and for some it is not. If they wish to top up that amount—for example, by working more—why should they not be able to do so? It should not be for the Government to prescribe exactly how each citizen lives his or her life at any one time. It is for the people to choose how to live their lives and for the Government to be an enabler. The amendments proposed by the hon. Member for North Norfolk enable them to have the choice and flexibility that, in principle, we support.

Meg Munn (Labour, Sheffield, Heeley)

I am delighted that we have had such a lively start to the Committee. These amendments seek to allow employees to choose the period over which they will receive their statutory maternity, adoption or additional statutory paternity pay. From April 2007, women who are expecting babies and adopters with whom children are placed will be able to receive up to 39 weeks’ statutory maternity pay, maternity allowance or statutory adoption pay after the Bill becomes law.

The amount of additional statutory paternity pay that a father or partner of an adopter may receive will depend on the detail of the scheme, which will be subject to further consultation. I note the concern expressed by the hon. Member for North Norfolk that the Bill deals with a range of regulations, but they will enable us to get the detail right through more consultation.

Norman Lamb (Liberal Democrat, North Norfolk)

On that narrow point, as I was quite properly prevented from referring to this issue in my introductory remarks, will the Minister gives us the likely time scale for the introduction of paternity leave rights?

Meg Munn (Labour, Sheffield, Heeley)

I ask the hon. Gentleman to be patient, as we will discuss paternity leave later in our consideration of the Bill. It is not quite relevant to clause 1.

Norman Lamb (Liberal Democrat, North Norfolk)

It is relevant to the amendment.

Meg Munn (Labour, Sheffield, Heeley)

It is, but I ask the hon. Gentleman to wait for our discussion later on. I am sure that he will receive a better response from my hon. Friend the Minister with the policy lead on that issue. It is good that we can work together on these things.

My comments, which are general, will explain the rationale behind the Government’s opposition to the amendments on statutory maternity and adoption pay and to the amendments on additional statutory paternity pay. The amendment seeks to allow employees to receive the same total payment but in a fewer weeks. The net effect would be that the employee would receive a higher amount each week if they chose a shorter period.

Maternity pay has a particular purpose, to which we must keep returning. It provides an element of wage replacement to help women to take time off work to prepare for and recover from the birth of their child. Adoption pay also has a particular purpose in that it provides an element of wage replacement to help adopters to take time off work to bond with the child, or indeed, children—sibling groups are often placed together for adoption—and to settle the child or children into their new home, which is an enormously important task for some of the most vulnerable children in our society.

The first months of a child’s life are very important to a mother, and the Government are keen to encourage employees to take as long as they want and need around the birth or placement of the child. We estimate that only about 16 per cent. of women—about 50,000 women—take less than 26 weeks’ maternity leave. By extending the pay period to 39 weeks, we are helping working parents to take more time off in the first year of their child’s life. Evidence shows that most mothers take their paid maternity leave, and it is our priority to extend paid leave to help them to take more if that is right for them.

Charles Walker (Conservative, Broxbourne)

Building on that point, I see some merit in telling a woman that taking the maximum amount of maternity pay over nine months would be the total pot of money for which they would be eligible, but it would insert an element of flexibility into the provision if that woman were allowed to have access to that pot at a variable rate for between six and nine months. That would provide some choice, but it would not be the free-for-all that it would be if the women worked for one month and then took the whole pot of money. The provision to allow the woman to take the money for between six and nine months could be varied, but the woman would have access to the total amount of money, whether she took it over nine months or over eight, seven or six months.

Meg Munn (Labour, Sheffield, Heeley)

I very much appreciate the spirit in which the hon. Member for Broxbourne (Mr. Walker) is entering into the debate and seeking to achieve a sensible balance. I agree that flexibility and choice are very important, but I shall respond to his point when I say why the Government are resisting such a flexible approach.

The hon. Member for North Norfolk talked about the amount of money going to people’s families. I emphasise that, in addition to statutory maternity pay, we should also consider the fact that families now receive additional money. The tax credits introduced in April 2003 are more generous and inclusive than any previous system of income-based financial support.

Norman Lamb (Liberal Democrat, North Norfolk)

Will the Minister give way?

Meg Munn (Labour, Sheffield, Heeley)

Would the hon. Gentleman be patient for a moment?

The value of child benefit has gone up by 25 per cent. since 1997, so families in the poorest fifth of the population are better off by an average of £3,200 a year. As a result of tax credits, about four in 10 families in Britain effectively pay no net tax. That number has risen by about 500,000 since 1997. It is wrong to say that the only money available to families is statutory maternity pay, which brings me back to the point that statutory maternity pay is wage replacement. As the hon. Gentleman knows, tax credits go way up the pay scale; but supporting families, and particularly families on lower incomes, is a completely different matter.

Norman Lamb (Liberal Democrat, North Norfolk)

I fully acknowledge that there is other income apart from the tax credits, but bearing in mind what the regulatory impact assessment says about the limited take-up of paternity leave, does the Minister none the less accept that some people will not take maternity leave or paternity leave because of the level of their pay?

Meg Munn (Labour, Sheffield, Heeley)

I was going to deal with the issue a little later, but the hon. Gentleman has raised it in an intervention.

We know that culture and people’s attitudes change over time. I do not say this to reflect badly on my late father, but when my brother was about to be born my mum rang for the ambulance; he packed her off in the ambulance and then went back to bed. Someone had to wake him to tell him of the phone call saying that his first-born son had arrived. My father loved his children very much, and he spent a great deal of time with us. However, that was the culture of nearly 50 years ago. Times change.

We are moving on from the introduction of paid paternity leave, of which there used to be none, to a system that will allow fathers to spend more time with their families if they so choose. Our estimate of what we think will happen is obviously based on current trends. There will be any number of reasons why fathers might or might not choose to spend time with their newborn child. As the hon. Member for Epping Forest said, we are talking about families, but each family is different, and they make different choices. We have estimated what we think will happen. It would be a positive thing from my perspective if more fathers took the opportunity of paid paternity leave, but I think that things will change over time. We are at the starting point. I shall now make some progress.

The majority of women start their maternity leave before their child is born. If we were to adopt the amendment, the amount of money that a woman received each week would depend on when she had decided to return to work—and if the amendment is accepted, that decision would have to taken before the child was born. That would make it difficult to adapt to the changed circumstances that the arrival of a child can bring.

My hon. Friend the Member for Dundee, West said earlier that the birth of a child can bring a great many changes to a family. A woman may start her maternity leave and start receiving her maternity pay up to 11 weeks before the baby is due. She may decide at that point to return to work after 26 weeks’ pay, which would be 15 weeks after the baby was born. However, the baby may be born late, or have health problems, and she may decide after the birth that she would prefer to stay at home for the next six months. In such cases, the maternity pay would run out about three months after the birth, requiring the mother to return to work at a point that had become unsuitable, despite her original judgment. Similarly, if she chose to return to work earlier than she originally intended, her employer would need to recalculate the payment and pay the arrears due; that would increase the complexities for her employer.

Eleanor Laing (Conservative, Epping Forest)

I appreciate what the Minister says, but is it not better to give a bit more work to those who administer the public funds than to deprive families and parents of necessary flexibility?

Meg Munn (Labour, Sheffield, Heeley)

We will discuss in a moment the difficulties of calculation and the impact of that on business and maternity payments, but this comes down to principles. The first principle is that maternity pay is wage replacement. We know that, setting out from that basis, families can calculate their financial situations and how much money they will have a week to manage their new situation. As for the level of maternity pay, I say to the hon. Member for North Norfolk that that has increased—the amount is somewhere among the deluge of bits of papers that I have been helpfully been provided with; ah, here it is—from £60.20 in 2001 to £106 now. That is a 70 per cent. increase. We should welcome that. In addition, there are other children’s benefits. That is the principle; I will come to the impact that the amendments would have on business.

Another consequence of the amendment—I think that my hon. Friend the Member for Tooting referred to this and used the term “windfall” in the first place, but I do not want to be the referee of a dispute across the Committee—would be that a woman who took only the compulsory two weeks after the birth would be entitled to receive 39 weeks’ pay for those two weeks. That means that a woman who earns over £30,000 a year could receive over £6,000 in statutory maternity pay for those two weeks, and then return to work and continue to receive her normal salary. The Government would fund at least 92 per cent. of the payment for those two weeks—the hon. Member for Epping Forest has, rightly, constantly reminded me over the past three or four weeks of the importance of taking care of public money, although it might seem like six weeks to her—and the woman’s employer would have to fund 8 per cent. of that payment and continue to pay her salary or wages when she returned to work.

Eleanor Laing (Conservative, Epping Forest)

The Minister is addressing the comments of the hon. Member for North Norfolk on the amendments; I simply want to make it clear that our position is that the nine months could be varied not to two or three weeks but to six months, or to seven or eight months or thereabouts.

Meg Munn (Labour, Sheffield, Heeley)

I understand that that is completely different to what is proposed in the hon. Gentleman’s amendments. I am sure that when we come to discuss the periods of extension in detail, we can deal with the issue of whether six months or nine months is appropriate, and with the interplay between the father and the mother in that situation.

As well as presenting employees with potentially difficult decisions, the amendment would add complexity for employers, who would need to calculate a different weekly rate for each employee depending on the length of time that they chose to receive their statutory pay. In addition, if we were to accept the amendments and allow employees to change their minds mid-receipt, even in limited circumstances employers would be faced with yet another recalculation of their statutory pay. Opposition Members regularly make points about the cost to business of regulation and the changes and difficulties around that. We seek to find the right balance in the Bill regarding giving families flexibility. As the hon. Member for Epping Forest rightly said, every family is different and they should all have the ability within a clear framework to make decisions about what is right for them. There must be that clear framework to enable families to understand to what they could be entitled, how to access the money and what the benefits would be for them individually.

Clarity must also exist for business. Without it, the cost to business would be enormous. Members of the Committee rightly referred to the issues that affect small businesses. I have only small businesses in my constituency. There are no large employers, so I know very well that the biggest problems are caused by issues that employers deal with only periodically. For most small employers, maternity leave issues come up only every so often. In dealing with maternity leave or a disciplinary matter, a small business will probably have to start from scratch and inform itself of what it needs to do. The greater the complexity that we put into such matters, the more difficult we will make it for small businesses and the more costly it will be for them.

Mark Prisk (Conservative, Hertford and Stortford)

I welcome the Minister’s remarks. Given that, as she rightly says, small employers have little experience of such matters, does she not see the benefit of the Government taking on an administrative role in certain circumstances?

Meg Munn (Labour, Sheffield, Heeley)

We have considered that, and the overall costs to provide that service to businesses are prohibitive. Other mechanisms are in place to assist businesses, the detail of which is I am sure on another bit of paper to which we shall perhaps return. It concerns the process of assisting small businesses to undertake calculations, confirming those calculations and having help at the end of a telephone. I or my hon. Friend the Minister with responsibility for employment relations, consumers and fair markets will come back with more detail about the mechanisms that are in place. We recognise that matters are difficult for small businesses and we want to provide as much help as we can. However, we have to be mindful of the costs.

Julie Morgan (Labour, Cardiff North)

Is my hon. Friend aware of the report of the Cardiff business school in the Welsh Economic Review about the impact of the Bill on small businesses in Wales? It does not regard the Bill as a burden on small businesses in Wales. In fact, it concludes that it will be of benefit.

Meg Munn (Labour, Sheffield, Heeley)

I am delighted that my hon. Friend drew my attention to the report. Despite my recent visit to Wales, of which she is aware, that was not one of the documents that was drawn to my attention. I should be interested to see it in more detail; it seems an interesting report. That people understand how the Bill will impact on small business is important for the Government.

Mark Prisk (Conservative, Hertford and Stortford)

The Minister talked about costs. I know from page 36 of the regulatory impact assessment that the Government have undertaken to pay £369 million of the £389 million that will arise from the policy costs of statutory maternity pay and maternity allowance. If my maths serve me correctly, that is 94.85 per cent. of the total cost. We learned in the debate that the costs could rise or fall. If they fall, that would be to the benefit of the Government and of business. If they rise, there could be a pinch point. Are the Government committed to maintaining 94.85 per cent. of the cost, if the costs rise or fall?

Meg Munn (Labour, Sheffield, Heeley)

Yes, that is the approach that we are adopting.

I have obtained a little more information about the issue of direct payments, which was raised earlier. Building on the work done by Her Majesty’s Revenue and Customs’ ad hoc consultation group on direct payment, the Government carried out a further analysis that demonstrated that such a scheme would represent neither good value for money for the taxpayer nor a significant saving for employers. It would provide about £1.1 million of savings for employers, of which only about £400,000 would accrue to small employers. The costs of implementing such a scheme are estimated at up to £75 million in set-up costs and £50 million per year in ongoing costs. It has been deemed that that would not be a good use of taxpayers’ money.

Norman Lamb (Liberal Democrat, North Norfolk)

On that narrow point, could the Minister provide the background calculations showing how those figures were arrived at, so that we could assess the matter for ourselves?

Meg Munn (Labour, Sheffield, Heeley)

In one sense, I am delighted to help; a full analysis can be found in a technical note on Her Majesty’s Revenue and Customs’ website, at—and this is the sense in which I am not delighted, because reading out website addresses is rarely easy; however, I will ensure that it is correct in Hansard—www.hmrc.gov.uk/pbr2005/smp.pdf.

Finally—I am determined to get to the end—the amendments would add more complexity, and would have the opposite effect to that which the Government want; we want to give parents the choice of staying at home for longer, and of looking after their child themselves during the first year of the child’s life. I therefore hope that the hon. Member for North Norfolk will consider withdrawing his amendment.

Norman Lamb (Liberal Democrat, North Norfolk)

The amendment was a genuine attempt to initiate a debate on how we can introduce greater flexibility and put greater power in the hands of the woman taking maternity leave, the father taking paternity leave, or either parent in respect of adoption leave. I fully acknowledge the flaws in the wording of the amendment. Earlier, the hon. Member for Tooting highlighted the risk of a windfall being paid in circumstances in which someone chooses to go back to work very early, so the amendment is not the finished product, and I readily accept that.

However, we ought to be looking into how we can ensure that the rights provided in the Bill are actually taken up. That is what I am interested in, and I think that that is what Government Members are interested in, too. The regulatory impact assessment identifies that as few as 9,000 fathers will take up the paternity leave right. As for maternity leave, on page 29 of the RIA, the assumption is that 8 per cent. of mothers who currently take 26 weeks will move to 39 weeks, so we are talking about a low proportion of mothers, too. I fully accept what the Minister says: in part, that is a cultural thing. It is a matter of changing attitudes.

Part of the reason why fathers, in particular, will not take advantage of the entitlement has nothing to do with money, but the Government must concede that it has something to do with money. Part of the reason why fathers will not take up the full entitlement is because they feel that they cannot afford to do so at the rate of £106 per week.

Kitty Ussher (Labour, Burnley)

Is there not a deep prejudice underlying what the hon. Gentleman just said—the idea that men earn far more than women? Is not that exactly the type of thing that we are trying to do something about? Changing the culture, in the way that we have proposed, will actually help.

Norman Lamb (Liberal Democrat, North Norfolk)

What I said was absolutely not about prejudice; it was an acknowledgment of the reality. The hon. Lady will know that there is a pay gap. We have unequal pay in this country. The Equal Opportunities Commission works tirelessly to try and remove that gap, but it exists. If we are serious in our aim, which I am sure we share, of getting fathers to take up paternity leave we must ensure that it is more than gesture politics. There is a real risk of coming out with a grand statement on the introduction of paternity leave when, quietly hidden away on page 85 of the RIA, it acknowledges that a tiny percentage of fathers will take it up—partly because of the pay. It will not actually mean much then.

Meg Munn (Labour, Sheffield, Heeley)

I am sure it is not hidden, as the hon. Gentleman has managed to find it. The estimate is on the basis of evidence from the maternity and paternity rights survey 2005. It is not a number picked from the air. The Government have to deal with reality, something with which I know that the Liberal Democrats have a problem. The hon. Gentleman needs to acknowledge that even in Sweden, where pay levels are higher, take-up by fathers is still low. It is, as much as anything, a cultural issue.

Norman Lamb (Liberal Democrat, North Norfolk)

The Minister introduces an element of bitterness in that intervention. I had thought this was being considered in such a reasonable tone, but that is a quite outrageous slur against my party.

Sadiq Khan (Labour, Tooting)

It was said with a smile.

Norman Lamb (Liberal Democrat, North Norfolk)

I accept that, and apologise. I had already accepted that it is partly cultural. That is understood, but it is partly pay too, and if the Government seek to deny that, they deny the absolutely obvious.

Kitty Ussher (Labour, Burnley)

I apologise for intervening again, but I am grateful for the opportunity. I believe that one reason why men are paid more is that in later life they have not taken paternity time off if they want it earlier. As I think I said at Second Reading, what tends to happen is that because the rights accrue to the woman and she spends more time at home, the man works harder. So the man, after a few years, ends up getting paid more. For people starting out, then, the purpose of the Bill is to prevent that happening if they do not want it. Therefore the hon. Gentleman’s comments about it being the pay at the point when a young family sets off do not actually apply.

Norman Lamb (Liberal Democrat, North Norfolk)

I thank the hon. Lady for that intervention. I accept her point, and that the Bill’s purpose is to address that problem. However, if the Government assume that only 9,000 fathers will take paternity leave, it will not do much to address that problem. So I want to find a way of facilitating fathers taking time off in practice, not just in terms of gestures. I am sure that the hon. Lady would agree that if the consequence of my amendment was that more fathers took perhaps eight weeks off—rather than no time at all—it must be a good thing. Surely it is good to find ways to encourage fathers to take an element of their entitlement, rather than nothing. That is what the amendment seeks to achieve.

To deal with another point, the hon. Member for Tooting raised the suggestion, in an intervention on the Conservative spokesman, that the amendment somehow sought to undermine the rights of low-paid people to take the full period. It does not, because the power is put completely into the hands of the mother or father. If either wants to take the full period, at the rate of £106 per week, that is their entitlement. I would be delighted if people did that, but it is simply an acknowledgment of economic reality that many people will not. The RIA accepts that, and I am seeking ways to ensure that people take advantage of the good entitlement that the Bill provides.

In summary, my amendment was a probing one in a group of amendments. I do not seek to press it to a vote, because it is currently incomplete, but I hope that the Government will do some further thinking on ways to increase flexibility. On the point about complexity for employers, it seems rather simple to me; if every employer knows that the entitlement is the full amount of statutory maternity, statutory adoption or statutory paternity pay, it is not really a complicated matter. Everyone would get to know the full entitlement for every employee taking time off. I do not see that that is any great complication for an employer to have to deal with. I beg to ask leave to withdraw the amendment.

Meg Munn (Labour, Sheffield, Heeley)

Clause 1 extends the maximum period for the payment of statutory maternity pay that may be prescribed in regulations from 26 weeks to 52 weeks. We aim to achieve our goal of 52 weeks by the end of the Parliament. As a first step we will increase the period of payment to 39 weeks for women expecting babies on or after 1 April 2007.

Mark Prisk (Conservative, Hertford and Stortford)

Is the Minister in a position to give us some information on the phasing of that? Clarity is crucial and employers will want to know what they are planning for. The Minister has referred to the end of the Parliament; that could be four or five years away depending on events in Government and within the ministerial ranks. I wonder whether she could give employers the opportunity to understand what she expects. If she cannot, when will employers know when 39 weeks will become 52? How much warning time will they get?

Meg Munn (Labour, Sheffield, Heeley)

I am not sure what the hon. Gentleman is referring to when he talks about events in the ministerial team.

Mark Prisk (Conservative, Hertford and Stortford)

The Chancellor may change.

Meg Munn (Labour, Sheffield, Heeley)

Thank you. Well, there we go.

The hon. Gentleman needs to take heart from the process with which we are involved at the moment. We are starting the process and giving employers notice that we will introduce the provision of 39 weeks on 1 April 2007. We want to assess how that goes and to remain in consultation. As I have said, employers know that our aim is 52 weeks by the end of the Parliament, but we will continue to consult and will give sufficient notice in line with the better regulation principles to which we adhere.

As I was about to say, this is an important change for working mothers and is part of our continuing drive to help pregnant working women and parents achieve a better balance in their home and working lives. An extra 13 weeks paid maternity leave will be worth nearly £1,400 to the majority of women. We set out our commitment to extend maternity pay in our consultation document “Work and Families: Choice and Flexibility.” The document was well received, with all sides recognising that any extra time that the mother has at home with her baby will be beneficial to the child but will also allow the mother greater opportunity to secure child care arrangements and to smooth her path to return to work. That will also be beneficial to her employer.

We recognise that some employers, and particularly small employers, are concerned that the absence of an employee over a long period can cause difficulties. We believe, however, that the increased availability of paid leave will make it easier for women to return to work and stay at work because they will have the opportunity to take the amount of paid maternity leave that they feel they need. Businesses will benefit because they will retain the skills and services of employees that they might otherwise lose, avoiding recruitment and training costs. We will, however, ensure that the views of employers are taken into account and that the impact of these important changes is fully understood and considered before any further extension of the pay period to 52 weeks is implemented.

Mark Prisk (Conservative, Hertford and Stortford)

I am grateful to the Minister and I welcome her point about consultation. Will she undertake to ensure that she and her colleagues meet with all the small business organisations prior to the bringing forward of any draft regulations, so that they will have an opportunity to contribute to those deliberations?

Meg Munn (Labour, Sheffield, Heeley)

Of course. There is regular consultation with such organisations not only on this matter but on other issues.

Of course, there are costs in the short term, both in paying statutory maternity pay and in arranging cover for absent employees, but those costs should be seen in context as an investment in the future for the employer. The taxpayer, through the Revenue, reimburses large employers 92 per cent. of the statutory maternity pay that they pay out and small employers get back all of the statutory maternity pay that they pay out plus an additional payment of 4.5 per cent. to meet their national insurance costs. We widened the definition of small employer in April 2004. Now, 60 per cent. of employers who pay statutory maternity pay in any year get back 104.5 per cent. of the statutory maternity pay paid out. In this Bill, we are making it easier for employers to operate statutory maternity pay. We will address that in more detail when we discuss the relevant schedule. We are amending the start date of the maternity pay period to align it with the start of maternity leave. In addition, we are making it possible for statutory maternity pay to be paid at a daily rate, to make it easier for employers to align SMP payments with their employees’ usual pay period.

Her Majesty’s Revenue and Customs is introducing an extensive package of support for employers; I referred to that earlier, and I am happy to give more detail to the hon. Gentleman now. The aim is to eliminate manual SMP calculation, and to make the assessment process easier to understand. For example, the electronic calculators that are already available are being improved, as is guidance, and plans are being worked on to help employers calculate SMP over the telephone via their employer helpline service. The telephone conversation will then be followed up with a written confirmation of the SMP calculation to the employer, thereby considerably easing employers’ concerns over the calculation.

This measure will benefit more than 390,000 women a year—about 317,000 who receive SMP, and a further 76,000 who receive maternity allowance. The payment period for maternity allowance is dependent on that for SMP, so the maximum maternity allowance period will also automatically be extended to 52 weeks as a result of this clause. Some 20,000 women a year who receive maternity allowance have not been employed long enough to qualify for additional maternity leave. They will therefore not have the right to take time off work and benefit from the proposed extra 13 weeks of maternity allowance. We are extending the eligibility condition attached to additional maternity leave so that all women who currently get ordinary maternity leave will get additional maternity leave and will be able to take the extra pay.

I shall now deal with how the clause works. It amends the regulation-making power in section 165(1) of the Social Security Contributions and Benefits Act 1992 to allow the maternity pay period to be a maximum of 52 weeks. The length of the maternity allowance period automatically follows by virtue of section 35(2) of that Act, which provides that the maternity allowance period will be the same as the maternity pay period. The extension of the maternity pay period—and, in consequence, the maternity allowance period—to 39 weeks will be specified in regulations. The extension of the maternity pay period forms a crucial part of a broad package of measures that will help parents choose how best to combine parenthood with their responsibilities towards their employer.

Clause 2 - Adoption pay period

Meg Munn (Labour, Sheffield, Heeley)

Clause 2 extends the maximum period for the payment of statutory adoption pay that may be prescribed in regulations from 26 weeks to 52 weeks; 52 weeks is the goal that we aim to achieve by the end of this Parliament. As a first step, we will increase the period of payment to 39 weeks for adoptions where the child is placed for adoption on or after 1 April 2007. That is an important change for prospective adoptive parents who are working, and it is part of our continuing drive to help working parents achieve a better balance between their home and working lives, while ensuring that adopters continue broadly to benefit from the same entitlements as birth mothers. An extra 13 weeks’ statutory adoption pay will be worth nearly £1,400 in the majority of cases.

We set out our commitment to extend adoption pay, mirroring the extensions to maternity pay and maternity allowance, in our consultation document, “Work and Families: Choice and Flexibility”. That document was well received, with all sides recognising that any extra time that the adopter has at home with his or her child will allow them greater opportunity to settle the child into their new family, to make any child care arrangements, and to ensure that they can return to work having taken the appropriate steps for their family. Adopters do an important job for society, and ensuring that they can return to work successfully is beneficial for them and their employers.

We recognise that some employers, particularly small employers, are concerned about the absence of an employee over a long period. However, the increased availability of paid leave will make it easier for adopters to return to work after the end of their leave, because they are more likely to have had the opportunity to take the amount of paid maternity leave that they feel they need to meet their needs and deal with the issues relating to the child or children who they are adopting.

Businesses will benefit because they will retain the skills and services of the employee whom they might otherwise lose, thus avoiding any new or further recruitment and training costs. We will ensure that the views of employers are taken into account and that the impact of these important changes are fully understood and considered before any further extension of the pay period to 52 weeks is implemented.

There are costs in the short term, both in paying statutory adoption pay and in arranging cover for absent employees, but those should be seen as an investment in the future. The taxpayer, through the Revenue, reimburses larger employers 92 per cent. of the statutory adoption pay and small employers get back all the statutory adoption pay plus an additional payment of 4.5 per cent. to meet their national insurance costs.

We have widened the definition of a small employer in April 2004, so more employers benefit. The Bill also makes it easier for employers to manage and administer statutory adoption pay. We are making it possible for statutory adoption pay to be paid at a daily rate, to make it easier for employers to align those payments with their employees’ usual pay period. That measure will benefit more than 4,000 adopters per year.

Clause 2 amends the regulation-making power in section 171ZN(2) of the Social Security Contributions and Benefits Act 1992 to allow the adoption pay period to be a maximum of 52 weeks. The extension of the adoption pay period to 39 weeks will be specified in regulations.

The extension to the adoption pay period forms a crucial part of a range of measures that will help parents choose how best to combine parenthood with their responsibilities towards their employer.

Mark Prisk (Conservative, Hertford and Stortford)

Will the Minister just confirm, as she did generously on the previous clause, that all the small business representatives will have the opportunity to look at the draft regulations? We do not have that chance, but it is important that they should do so and have a chance to contribute to the regulations before they are brought to the House.

Meg Munn (Labour, Sheffield, Heeley)

I am happy to do that. That is our practice with regulations.

Norman Lamb (Liberal Democrat, North Norfolk)

We strongly support this extension. It is remarkable that people adopting a child have not had rights until recently. It is shocking that life has been made so difficult for them in that adopting process. This is a crucial right for parents adopting a child.

Eleanor Laing (Conservative, Epping Forest)

Once again, I concur with the hon. Gentleman. It is good to see the Minister bringing forward this provision, because encouraging people to adopt is crucial. There are so many children who need to be adopted and given a second chance in life due to the circumstances in which they were born and lived their early lives.

It is incredible to think that we have not previously treated adoptive parents in the same way as birth parents. We support the clause.

Clause 3 - Additional paternity leave: adoption

Kitty Ussher (Labour, Burnley)

I beg to move amendment No. 17, in clause 3, page 2, line 24, after ‘child’, insert

‘and that the commencement date for such leave is the same as the return to employment or self-employment of the child’s mother.’.

Hugh Bayley (Labour, City of York)

With this it will be convenient to discuss the following amendments:

No. 23, in clause 3, page 2, line 27, leave out paragraph (a).

No. 35, in clause 3, page 2, line 46, at end insert—

‘(f)limit the total number of days during a period of leave under this section in which an employee may work for his employer without bringing the period to an end.’.

No. 36, in schedule 1, page 18, line 36, at end insert—

‘(d)limit the total number of days during an ordinary maternity leave period in which an employee may work for her employer without bringing the period to an end.”.’.

No. 30, in schedule 1, page 18, line 45, at end insert—

‘(c)may limit the total number of days during an additional maternity leave period in which an employee may work for her employer without bringing the period to an end.”.’.

No. 31, in schedule 1, page 19, line 2, leave out from ‘(2)’ to end of line 4 and insert—

‘(a)may specify circumstances in which an employee may work for his employer during an ordinary adoption leave period without bringing the period to an end;

(b)may limit the total number of days during an ordinary adoption leave period in which an employee may work for his employer without bringing the period to an end.”.’.

No. 32, in schedule 1, page 19, line 13, at end insert—

‘(c)may limit the total number of days during an additional adoption leave period in which an employee may work for her employer without bringing the period to an end.”.’.

Kitty Ussher (Labour, Burnley)

It is an honour to move my first amendment under your chairmanship, Mr. Bayley.

This is a probing amendment to elicit a little more elucidation from my hon. Friends on the Front Bench as to their intention when laying down regulations determining the precise nature of mainly fathers’ ability to take paternity rights.

In the pre-Budget report a year ago, the Chancellor said that the Government would allow mothers to transfer part of their leave to fathers. That was all that was said at that point. The impression was given that it would be quite a flexible arrangement so that at any point in the maternity leave if both parents wanted it the leave could be transferred to the father, who could take over the responsibility for the young child. Since then the Government have consulted on their proposal. Although no decision has yet been made and I understand that none will be made during the passage of the Bill, some remarks have been made that suggest that Ministers are moving towards a situation where they would prefer the woman to take the first six months and the man to take any entitlement that remains, up to an additional six months.

My amendment would return us to the spirit of the original announcement so that it would be entirely flexible. If a woman wished to return to work before six months, the father would take up the leave if he wanted to at that point. This is important because otherwise, if both parents wished to swap over, it would be denied to them. That could be a problem where the woman wanted to go back to work because it was important to her identity and happiness or where it was financially sensible for her to do so. Although the majority of cases may not be like this, as was emphasised in our earlier debate, she may earn more and it may be in the financial interests of the family, and therefore the child, for her to return earlier if she wants to. The mother may be in such a position in her organisation—perhaps a small business or even a large corporation—that she wants to return early for fear of what might happen to that organisation if she does not continue to be at the helm.

I must declare a small interest here, as a female Member of Parliament with a small child. I wished to return to work and my constituents wished me to do so, but under the current legislation my husband had to resign his job in order to take over the care of our child. If we do not accept the spirit of this amendment in regulations, we shall be in an anomalous situation where parents would have to introduce an alternative form of child care for the period from three to six months, which would seem unnecessarily disruptive if a father wished to take over. Alternatively, the Government would make it more likely that a small business with a mother at the helm would fail, which is not what we are attempting to do. The mother would be forced to remain at home until her husband was able to take over.

I understand that there has been considerable consultation on this. I should like to give my response on what I think some of the issues are. Obviously, Department of Health guidelines and World Health Organisation guidelines state that women should be encouraged to breastfeed for the first six months. However, it is not law that they should do so. If that is what we intend, we should legislate for it. The Department of Health makes all sorts of other recommendations about eating five portions of fruit and veg each day, not smoking, not drinking too much and so on. Ultimately it is a matter of choice. It is also technically possible to return to work and breastfeed through expressing milk. It is tedious, but it is possible. Indeed, in other parts of the statute book we make it easier for mothers to do that through the legal requirement on employers to provide places where they can express milk and so on.

I understand that businesses may find it complex to have to keep track of what the mother is doing when a father asks to exercise his paternal rights. However, that would also be the case if they decided to do it at month 7 or month 8, which is what the Government seem to be suggesting at the moment. I do not see how it is more complex to do it at month 4 than at month 7. A large number of the consultees did not favour it. However, some did. Those who did represent an enormous interest group—fathers, through Fathers Direct. My question to my hon. Friends is whether the responses to the consultation are representative of the type of people who need the spirit of the amendment to be reflected in regulations. I never thought that I would say this, but I have tabled the amendment because I believe that the provision discriminates against men, and I am all in favour of equality.

Norman Lamb (Liberal Democrat, North Norfolk)

I am sure that the hon. Lady will not want me to say it, but the amendment seems to be intended to introduce the same sort of flexibility that I was aiming for in my amendments. I support her aim of eliciting elucidation, as I think she put it. There should be flexibility for mothers and fathers to make the relevant judgments themselves, rather than having a straitjacket placed on them. Despite the pay gap that, as I pointed out, sadly still exists, there are, none the less, many households where the woman earns more money, or is in a more responsible and more onerous job than the father. There may be many circumstances in which it suits that household for the woman to return early to work and hand over to the father.

The Bill seems to introduce a real block by requiring that if the woman of a household has very good personal reasons for wanting to return to work after, say, three months, a period of another three months would have to intervene in which another carer would look after the child, before the father could take his entitlement to paternity leave. I am sure that the Government would want to avoid that consequence. It does not seem a good approach to the care of the child to have the mother caring for him or her for three months, a carer for the second three months, and the father thereafter. We should all try to avoid that outcome.

I should have thought that, given that the sharing of maternity and paternity leave—the substitution that the Bill provides for—introduces a complexity that employers will have to deal with at some stage in any case, it would make no difference if they had to deal with that task after three months rather than after seven or eight, or whatever period would need to be clocked up under the Bill and the expected regulations. As the hon. Lady said, the signs are that the regulations would provide for the right to paternity leave only after six months.

The Bill should provide the flexibility to facilitate matters for those households in which, for good reasons, the choice is made for the mother to return to work earlier and the father to take over. At the moment, the impression we get from the Government is that that flexibility would be blocked.

Eleanor Laing (Conservative, Epping Forest)

I am grateful to the hon. Member for Burnley (Kitty Ussher) for tabling the amendment and speaking to it so eloquently. It raises an important issue about the way in which the Bill is designed to operate. It comes back again to flexibility, choice and the fact that each family is different. The hon. Lady herself is a good example of what I am talking about, and having been in a similar position I have every sympathy with her. As Members of Parliament, we are fortunate; although we work very long hours in comparison with the average, we have a bit of flexibility in how we arrange our days and weeks. In our job, it is possible to give birth to a baby, look after it and continue working. I was amazed to find that that was possible. I am sure that the hon. Lady has much more confidence than I, but somehow or other I have managed to muddle my way through and I now have a happy, healthy four-year-old.

I am sure that the hon. Lady will agree that flexibility and choice are vital. As she was explaining why she tabled her amendment and the possibilities that could arise, something occurred to me: what if the mother of a new baby became ill? That is not unusual. Last week, I had a meeting with the Epping Forest mental health trust and we discussed where its resources should be used and so on. I discovered that the incidence of post-natal depression is much higher than anyone imagines.

I am sure that we can all think of cases in which, for some reason or other, mothers simply cannot look after their babies and need help. In such cases, the natural next person to look after the child is its father, so the Bill should make provision for a father to begin looking after a child as soon as it is born. Perhaps the mother will not have gone back to work, but is ill and unable to look after her child—I use post-natal depression only as an example; there are all sorts of ways in which that could happen. That the father is not able to take paternity leave immediately, should that be necessary, simply does not make sense. The hon. Lady’s amendment and the others in this group are therefore worthy of consideration.

I am sure that the Minister will consider the points made in the spirit in which they are meant. In my case, I want to improve the Bill, not change the intention behind it or increase costs and complicate matters for employers, especially small employers. I simply want to give flexibility and choice, so that any family can respond at any time to the circumstances in which it finds itself.

Norman Lamb (Liberal Democrat, North Norfolk)

I appreciate your forbearance, Mr. Bayley. I should acknowledge that the Minister with responsibility for employment relations, consumers and fair markets, who is a good friend, pointed out from a sedentary position that I had not spoken to my amendments in this group. I am grateful for the opportunity to speak briefly to them.

The group of amendments deals with keeping-in-touch days, which are a good part of the Bill. The concept is that during a period of ordinary or additional maternity leave, of the different types of adoption leave or of additional paternity leave, it is perfectly appropriate for an employee to go into work on an agreed basis for a certain number of days to keep in touch with and perhaps liaise with their replacement employee and so forth.

However, there is a concern, expressed by Citizens Advice, that unscrupulous employers might seek to put too much pressure on employees to come back for too many days. The purpose of this group of amendments, which covers all the different sorts of leave in the Bill, is to set a framework within which the discussion between employer and employee can take place, and to limit the number of keeping-in-touch days provided for in the regulations. Within that maximum number, the employer and the employee can negotiate without any risk of the employer seeking to exploit the opportunity to force the employee to work too much during the period of leave. We again seek to set a framework within which the two sides can negotiate a reasonable arrangement. The proposal in no way seeks to undermine the good concept of introducing the right to have keeping-in-touch days.

Julie Morgan (Labour, Cardiff North)

I speak in support of the amendment tabled by my hon. Friend the Member for Burnley, which supports flexibility. Each family should be able to work out what is best for it. It is important that we have flexibility.

I want to make a few points about breastfeeding. My hon. Friend covered the issues that arise with the recommendation that women should breastfeed for six months. I want to use the opportunity to say how difficult it often is for women to breastfeed for six months, even if they do not go back to work. That partly results from the culture of the society in which we live. It is important that we do all we can to support workplace conditions that will encourage and enable breastfeeding.

I was involved in a campaign to improve conditions in this place some years ago. As a result of that, we have some rooms where MPs, other members of staff and the public can go to breastfeed in the Parliament building. However, that is far from adequate in terms of the culture that we would like. In strongly welcoming my hon. Friend’s amendment, I want to make the point that there is an issue to address on breastfeeding, whether women return to work after three months or six months.

Gerry Sutcliffe (Labour, Bradford South)

Good morning, Mr. Bayley. I listened with interest to the high-quality debates on the previous clauses and amendments. I welcome you to the Chair and thank you for chairing our discussions. If you will allow me, I will set out the context for the amendments and the clause.

A great deal of discussion has taken place, as my hon. Friend the Minister with responsibility for women and equality mentioned, about the balance that needs to be struck between the needs of the employees, the needs of the employer and the overall position of the labour market strategy.

The hon. Member for North Norfolk talked about a revolution that had taken place. I agree with him, but it had starting points in many of the acts of this Government in 1997. The British social attitudes survey 2004 has been launched, and it shows people’s attitudes to work and the working environment. In 1994, nearly half—47 per cent.—of employees worked flexibly; in 2004, that had increased to 57 per cent. That is a tremendous increase, which also shows the cultural change that we are trying to address in terms of people’s attitudes to work. That is important because of the demography of the country, the competitive situation that most of our companies are in and the need for them to treat their employees in a proper manner.

I can remember my experience of being a factory worker. I went to start my shift one day having had problems with child care provision, and I arrived at work late. The supervisor said, “I don’t care what happens anywhere outside the workplace, your job is to be in here for eight hours and to work for those eight hours.”

That attitude is what needs to change. The way the Government have gone about that since 1997 is to try to get a consensus about how we deal with it. It is no good the Government coming forward with a long list of aspirations that are meaningless to people in a workplace situation, be that employer or employee. I hope that that sets the context for the remarks that I will made about the amendments.

Mark Prisk (Conservative, Hertford and Stortford)

Without wishing to test people’s patience too far, I appreciate that the Minister’s comments were contextual but does he accept—I am sure he will—that the instance to which he referred was an exception? In other words, the vast majority of employers are keen and willing to ensure that if they can accommodate their staff’s family concerns, they do so.

Gerry Sutcliffe (Labour, Bradford South)

I am indeed prepared to do that, and the success of the introduction in 2003 of the right to request flexible working has shown that 90 per cent. of requests are met. However, I gave that example to illustrate the historical way in which some people—not necessarily employers but middle management—addressed some of those issues. We may return to the question of middle managers later in our discussions.

I congratulate my hon. Friend the Member for Burnley on her first amendment. She said that it was a probing amendment, so I hope that she is not defeated on it and will accept the Minister’s wisdom in his response to it. I hope that that will not test her patience too far. I know that she has played a considerable part in the fashioning of the Bill in her previous roles outside Parliament, and I congratulate her on that. I shall also be grateful if the hon. Member for North Norfolk remembers to move his amendment, or he will make a large part of my speech redundant.

Norman Lamb (Liberal Democrat, North Norfolk)

That was self-interest.

Gerry Sutcliffe (Labour, Bradford South)

Self-interest, or rather the power of friendship.

Turning to amendments Nos. 17 and 23, one of the options in the 2003 Green Paper, “Work and Parents: Competitiveness and Choice” was that the second six months of a woman’s maternity leave could be taken by a father. At that time, the proposal did not receive as much support as other options, so was not pursued. My hon. Friend the Member for Burnley said that whether the leave could be shared was considered. When we looked at extending maternity pay, we returned to the idea, as we felt that its time had come. The consultation paper, “Work and Families: Choice and Flexibility”, published in February this year, asked when the earliest point should be for a mother to transfer her leave and pay entitlement to the father. We were open minded about the start date, so we consulted on the three options: six weeks, three months, and six months. The overwhelming majority of those who responded said that the first six months of the mother’s maternity leave period should be reserved for the mother.

I shall quote one of the many responses that we received on that point:

“We recommend the implementation of option 2 (transfer of leave and pay after six months following the start of maternity leave) because paid maternity leave was extended to six months just two years ago, and needs time to bed in for employers and employees. However, the Equal Opportunities Commission proposes that the option to transfer maternity leave before six months could be reviewed at a future date, in the light of experience of managing shared parental leave.”

The CBI members believe that

“mothers should be able to transfer a proportion of their leave and pay six months after her maternity leave has started.”

As hon. Members are aware, since publishing the consultation document in February 2005, the Government have decided to offer a period of additional paternity leave to fathers, rather than transferring maternity leave. However, the question about the earliest date at which the father can start his leave remains the same. If women were able to return to work at any point in their maternity leave period, allowing fathers to take up additional paternity leave at any time could lead to women feeling under pressure to return at an earlier point than they may actually wish. That may give rise to health issues and undermine the women’s ability to continue to breastfeed if she so wished.

I take the point made by my hon. Friend the Member for Cardiff, North (Julie Morgan), about the guidance of the World Health Organisation on that—although it is guidance, not law. I refrain from getting involved in further discussion on that issue, to the extent that that advice and the need to consider six months was important to us.

Introducing the possibility of mothers returning to work at an earlier point to allow for fathers to take additional paternity leave could mean a greater risk of women changing their minds, which would cause disruption to her employer and possibly the father’s employer. There would be a risk that if her early return to employment did not work, she may leave the employment and possibly be absent from the work force for a longer period of time. We think that the risk of that happening is greater if the woman returns after a short period of leave. Business has raised concerns about uncertainty attached to maternity leave, and the disruption caused by losing a valuable member of staff.

Norman Lamb (Liberal Democrat, North Norfolk)

One of the contributions to the consultation exercise that the Minister referred to indicated support for a six-month period but also said that the Government should consider greater flexibility later on in the light of experience. Is that what they intend to do?

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to the hon. Gentleman for raising that point. As I said in the contextual part of my speech, the Government have tried to set the agenda—to prove that something works and then move on, or to reflect about the success of a particular aspect. Yes, it would always be our position to reflect on how something is working. The EOC submission was that the provision has been in place for only a short time, and that we should let it bed in and consider it later. We are happy to do that; that is how successful policy is developed.

In our conversations with business groups on the question of fixing the earliest point at which additional paternity leave can be taken, it was recognised that there could be increased pressure on business to provide occupational top-up pay to fathers, as many businesses already offer occupational top-ups to mothers on maternity leave in the first six months. Business groups felt that if the father took additional paternity leave in the second six months, that pressure would be somewhat dissipated. If the start point for taking additional paternity leave was not fixed, the pressure placed on the mother to return to work if the father had enhanced occupational top-ups would also be greater. We wish to avoid pressuring the mother to return to work.

We have listened to the comments received in response to the consultation, and we include in subsection (5)(a) of proposed section 80AA to the Employment Rights Act 1996 the power to allow us to fix a point from which the additional paternity leave can be taken. The intention is to reserve the first six months of a mother’s maternity leave. We intend that point to be prescribed in regulations, and we suggest in our consultation on the detail of the scheme that we are due to launch in the new year that it should be 20 weeks from the birth of the child. That reflects the fact that the average mother begins maternity leave six weeks before the birth; the provision would provide the closest proxy to reserving the first six months of a mother’s maternity leave.

The hon. Member for Epping Forest spoke about the need for about flexibility in exceptional circumstances, but she will be aware that there already exists two weeks paternity leave, with the opportunity for a further four weeks of unpaid leave. The father also has the right to request flexible working. Other legislative provisions support exceptional circumstances.

Norman Lamb (Liberal Democrat, North Norfolk)

Does the Minister acknowledge that the two weeks statutory paternity leave have to be taken in the first eight weeks after the birth? There is not much flexibility in the first six months.

Gerry Sutcliffe (Labour, Bradford South)

I recognise that, but I refer again to what I said about balance and getting employers and employees on side. There are provisions for exceptional circumstances in the first two weeks, and there are opportunities for additional leave. We are talking about the minimum standards to be laid down in legislation.

I spoke of the survey showing that attitudes are changing. Many businesses see the business case for looking after their employees. They are developing positive policies that are way in excess of the statutory provisions being laid down by the Government. That is to be welcomed. In the context of the labour market strategy, the Government are concerned about discrimination against women, and particularly against those of child-bearing years. It is illegal, but we know that it happens, and we must try to ensure that all businesses understand the worth that women can contribute to their work force. Indeed, many good employers already see that.

Mark Prisk (Conservative, Hertford and Stortford)

I am interested in the Minister’s remarks. What lessons does he take from the situation in Sweden, where women are finding that oppressive and restrictive legislation has made them less desirable as employees? They therefore seek more flexibility. That may mirror some of the points to which the amendment refers.

Gerry Sutcliffe (Labour, Bradford South)

There is good and bad in each member state’s employment legislation. We want Europe to pick the best legislation that supports the development and growth of jobs and that helps social protection and welfare. There is a balance to be struck. Labour market flexibility and the demographic changes faced by the UK are important, and businesses need to know that they have to attract good employees. Women can and do play an important part in our economic life. It is important that employers realise that, and they must understand that they need to support and develop the aspirations of women not only in the working environment but in the family environment.

I turn to the amendments tabled by the hon. Member for North Norfolk. I am grateful to the hon. Gentleman, as they give us the opportunity to discuss the introduction of keeping-in-touch stays and, in particular, the principle that the number of such days should be limited. The Government’s working families consultation considered how we could enable good communication to take place between women and employers during maternity leave.

Following the consultation, we have committed to clarifying in law the principle that the employer will be able to make reasonable contact with the woman during her maternity leave. The reasonable contact provisions will be set out in regulations, on which we will consult in the new year. The Bill also provides enabling powers for us to introduce keeping-in-touch days. Keeping-in-touch days will enable women to carry out some work activity during their maternity leave without bringing it to an end. The same principles apply to adoption leave and to additional paternity leave. An adopter may take up to one year’s leave when a child is placed with them, so the same difficulties with regard to employers and employees losing touch could apply. The Bill allows us to provide that a father may take up to six months’ additional paternity leave and that, in the unfortunate circumstances in which a child’s mother dies, he may take up to one year’s additional paternity leave. Therefore, working mothers, fathers and adopters and their employers will all benefit from the introduction of keeping-in-touch days.

We will consult on the detail of the scheme when we publish regulations in the new year. Parallel provisions will ensure that an employee does not lose any statutory maternity, adoption or additional paternity pay or maternity allowance by taking advantage of keeping-in-touch days. Keeping-in-touch days will help working parents and employers to stay in touch during maternity, adoption and additional paternity leave, and will enable employees to carry out some work activity. That might be actual work—whatever the employee would have been doing had he or she been working as usual rather than being on leave—or an opportunity to go into work for activities such as appraisals and team meetings.

Enabling that contact to take place will strengthen links between working parents and employers during maternity, adoption or additional paternity leave, and will help parents to keep up with developments at work and update their skills. We expect that that will ease the transition back to work after leave, enabling parents to get back up to speed more quickly after their absence. Such a provision should ease any concern that employers and fathers might have about what impact the new right to additional paternity leave will have on them.

The hon. Gentleman’s amendments would set out in the Bill a requirement to specify the number of keeping-in-touch days that would apply during ordinary and additional maternity leave, ordinary and additional adoption leave and additional paternity leave. Our intention has always been that the number of keeping-in-touch days should be limited. Keeping-in-touch days are intended to enable employees and employers to keep in touch. We do not intend them to facilitate a kind of part-time leave so, by their nature, they must be limited. Therefore, although I welcome the hon. Gentleman’s amendments—they show that we are in agreement on the matter—and am grateful that we agree in principle, I do not believe that the amendments are necessary. The Bill provides powers for us to specify the circumstances in which an employee may work for an employer during maternity, adoption or additional paternity leave. That is sufficient to enable us to limit the number of days on which an employee may work. Accordingly, I ask the hon. Gentleman not to press his amendment.

Kitty Ussher (Labour, Burnley)

I just wanted to put on record my gratitude to my hon. Friend for having clarified the situation. I suspect that my amendment is slightly ahead of its time and I am grateful for his commitment to consider the issue again in future.

Norman Lamb (Liberal Democrat, North Norfolk)

In terms of the hon. Lady’s amendment, the Minister indicated in response to an intervention from me that he was willing to consider the matter again. I certainly welcome that; it seems sensible to adopt an incremental approach. So far as my amendments are concerned, I am pleased that the Government accept them in principle, and am not entirely surprised that he has decided that they are unnecessary. We will have to trust the Government to implement them by way of regulations when the time comes. The important principle is that a framework should be set within which keeping-in-touch days will operate.

I should say that, from my experience in my previous life as an employment law solicitor, there has always been a great fear on the part of employers that any contact with the employee during a period of maternity leave will get employers into trouble, and that it is not appropriate to talk to the woman on maternity leave. That is crazy; it is not in the woman’s or the employer’s interests. There ought to be reasonable contact. The concept of keeping-in-touch days enshrines that principle. It is perfectly sensible for the employee to return to work for a defined and limited number of days to maintain that contact, something that I am sure many employees would very much welcome. As the Minister said, that would help to facilitate, in due course, the return to work.

Kitty Ussher (Labour, Burnley)

I beg to ask leave to withdraw the amendment.

Norman Lamb (Liberal Democrat, North Norfolk)

I beg to move amendment No. 1, in clause 3, page 3, line 5, at end add—

‘(10)Regulations under this section shall be made by statutory instrument.

(11)No statutory instrument containing regulations under this section may be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

Hugh Bayley (Labour, City of York)

With this it will be convenient to discuss the following amendments: No. 24, in clause 3, page 3, line 5, at end add—

‘(10)No regulations made under this section may be made unless a draft of the intrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 2, in clause 4, page 4, line 23, at end add—

‘(11)Regulations under this section shall be made by statutory instrument.

(12)No statutory instrument containing regulations under this section may be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 25, in clause 4, page 4, line 23, at end add—

‘(11)No regulations made under this section may be made unless a draft of the intrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 3, in clause 6, page 6, line 3, at end add—

‘(5)Regulations under this section shall be made by statutory instrument.

(6)No statutory instrument containing regulations under this section may be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 4, in clause 7, page 7, line 9, at end add—

‘(6)Regulations under this section shall be made by statutory instrument.

(7)No statutory instrument containing regulations under this section may be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 5, in clause 8, page 8, line 4, at end add—

‘(4)Regulations under this section shall be made by statutory instrument.

(5)No statutory instrument containing regulations under this section may be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 6, in clause 9, page 8, line 22, at end add—

‘(4)Regulations under this section shall be made by statutory instrument.

(5)No statutory instrument containing regulations under this section may be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 7, in clause 10, page 9, line 37, at end add—

‘(11)Regulations under this section shall be made by statutory instrument.

(12)No statutory instrument containing regulations under this section may be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.’.

No. 26, in clause 12, page 10, line 29, at end add—

‘(11)No regulations made under this section may be made unless a draft of the intrument has been laid before, and approved by a resolution of, each House of Parliament.’.

Norman Lamb (Liberal Democrat, North Norfolk)

I will keep my remarks brief, and deal with all the amendments in my name together. In my opening remarks—when you correctly stopped me developing this point, Mr. Bayley—I sought to make a point raised by the TUC in its commentary on the Bill. It said that the Bill leaves an awful lot to regulations. There are dangers in that. If one were to read the Bill as it stands without any explanatory notes, one would be left largely in the dark about an awful lot of the details of what will finally emerge by way of regulations. Also, that approach leaves open the question of when the regulations will be tabled for consideration, and what the time scale for the introduction of those rights will be. I stick by the principle that, by and large, it is better for more to be on the face of the Bill, so that there can be proper democratic debate on it.

Gerry Sutcliffe (Labour, Bradford South)

I understand the point that the hon. Gentleman is making, and I shall have more time to go through it in detail in my response, but if we put everything in the Bill, that cuts out the flexibility for negotiations and consultation. Surely the aim is to get our principles and objectives—what we are trying to achieve—in the Bill, and then to use the regulations for further consultation?

Norman Lamb (Liberal Democrat, North Norfolk)

I am grateful to the Minister for that intervention, and I take that point, to some degree. None the less, it is possible to have consultation before the Bill is presented to Parliament; indeed, there has been some. I acknowledge that there is always a balance to be struck. Any Government will use the mechanism of regulation to fill in the details, and I accept that there is a place for that; it is a question of degree. My feeling is that the Bill goes a bit too far in the direction of relying on regulations to implement the detail of the provisions. However, that is the way that things have been done, and I accept that.

At the very least, it ought to be possible for Parliament to debate those regulations—the culmination, as the Minister says, of that further consultation process—once they have been prepared. If the process is simply one of consultation followed by statutory instruments being introduced without opportunity for debate in Parliament, that would be a bad thing. As a package, the amendments propose the affirmative process in relation to the set of clauses that provide for regulations to be introduced to flesh out the objectives of the clauses.

Eleanor Laing (Conservative, Epping Forest)

My amendments Nos. 24 to 26 have a similar effect to those of the hon. Gentleman. This is getting very unusual.

Norman Lamb (Liberal Democrat, North Norfolk)

It is a bit scary.

Eleanor Laing (Conservative, Epping Forest)

I agree with the hon. Gentleman once again. I am sure that we will find something on which we can heartily disagree when we come to the next part of the Bill.

I am concerned about amendments. Again and again in recent weeks the Government have presented Bills that have gone into Committee only eight days after Second Reading, so that only one weekend elapses, whereas until recently the convention generally followed by every Government was that there should be two clear weekends between Second Reading and Committee. That gave everyone concerned the time properly to examine the Bill, consult outside bodies and table amendments, and it gave time for the Government to produce the regulations on which the measure would depend. On Second Reading I made that point, and so did my hon. Friend the Member for Mid-Worcestershire (Peter Luff), who asked the Secretary of State whether he intended to make the draft regulations available to the Committee before it finished its work. The Secretary of State said:

“We can try. The timetable is a little tight, but I hope that we can publish those regulations before the Committee rises.”

It is entirely within the Government’s power to change the timetable. There is no reason why we should be considering the Bill in Committee today rather than next Tuesday or as soon as we come back after the Christmas recess in January. We all welcome the Bill and want it to be made law as soon as possible, but it is not an emergency Bill. It does not make very much difference whether it becomes law in spring or early summer. A few weeks do not matter, but what matters for the proper working of the democratic process is that Members of this House and, indeed, another place, should be able properly to consider what the Government intend to do.

Once again, as with other Bills in recent weeks, the regulations have not been published. We are asked this morning to consider clauses 3 to 10, all of which are dependent on regulations, but we do not even have an undertaking from the Government that those regulations will come before the House by the affirmative rather than the negative procedure. It is quite improper that we should reach this point in the Bill’s consideration without knowing what the Government intend. What do they have to hide by not producing the regulations? We are all in favour of the intent of the Bill, but it is our duty, as representatives of our constituents, to hold the Government to account for the exact provisions that they propose to implement. We cannot do that because we do not know what they are. Much of our debate this morning would have been much better informed—and it still would be, in the remainder of the Bill’s time in Committee—if we had the regulations.

It is hard to understand how the Secretary of State could seriously say,

“We can try. The timetable is a little tight”,

adding

“but I hope that we can publish those regulations before the Committee rises. That is probably a heroic ambition, but I hope that we can publish the regulations while the Bill completes its remaining stages and certainly by the time that it returns from the Lords.”

It is also quite improper that we should expect our colleagues in another place to give consideration to the detail of a Bill when Members of this House cannot do so. I am a strong supporter of the work done by the second Chamber, but it is supposed to be a revising Chamber. How can it revise when we have not first considered the matters that it will be expected to deal with?

It is impossible to understand how the Secretary of State can stand up in the House with a straight face and say that he would like the Committee to agree in principle to regulations that the Government have not yet brought forward—and can expect the Minister this morning to do the same. The Government have known for many months that they would introduce the Bill. It has only 20 clauses. The issue is not complicated, except in the detail of its administration.

I referred earlier to the way in which tax credits have worked—or rather have not worked. One of the reasons why the tax credit system does not work properly is that the detail of its administration is neither thorough nor good. We all know from cases in our constituencies that the tax credit system does not work. I accept that the intention behind the provisions is good, but I do not want them not to work just because their detail has not been considered properly. However, we as a Committee cannot consider the detail when it is not laid before us. I feel strongly about the matter and I hope that the Minister will take it up.

On Second Reading, the Secretary of State said:

“That is probably a heroic ambition”.—[Official Report, 5 December 2005; Vol. 440, c. 650.]

If it were his ambition to bring forth the regulations at the proper time, it is perfectly within his power as Secretary of State to achieve that ambition. I admire his ambition, but I deplore the fact that he has not done so, given that he could easily have achieved it if he had wanted to. All that needs to happen is for further consideration of the Bill to be postponed until such time as we have the regulations before us. There is no reason why that cannot happen.

Gerry Sutcliffe (Labour, Bradford South)

I feel that I have been told off by the hon. Lady. However, she has the whole situation wrong. She does not understand how parliamentary procedure operates. If the Government had been operating out of order, Mr. Bayley, you would have stopped the discussions.

It may be useful if I explain the process. The Committee must remember that the Government want change and want it to happen in a particular way. They are using all the better regulation aspects that they can in introducing legislation. The format that is followed is: first the Green Paper, then the White Paper, and then the Bill and the regulations that flow from it. When it is possible to put the draft regulations before hon. Members when they discuss matters in Committee, the Government try to do that. This morning’s example of the hon. Lady and the hon. Member for North Norfolk using probing amendments to persuade the Government to change their mind would be lost if the Government had said in Committee, “This is all that we will do. We will not change our view.”

When we discuss clauses, we examine the objectives and the principles behind what we are trying to achieve and, through the regulatory process and SIs, apply those regulations by using the affirmative or the negative procedure. I shall come on to what we shall do under the Bill later. We try to stick to a consultation period of about 12 weeks, so that we can give stakeholders the opportunity to consider what the Government intend to do and then try to make sure that the regulations fit that intention. As we know, regulations can be changed without the need for further primary legislation, so it is useful to have regulations that flow from primary measures. That procedure works.

As for the other place, it introduces Bills. It introduced the Company Law Reform Bill, which will come to us in the new year. It is not unusual for the other place to deal with issues that have not been dealt with in this place.

Eleanor Laing (Conservative, Epping Forest)

I hear what the Minister says. His explanation was clear. In that case, why did the Secretary of State say that he had a heroic ambition to bring the regulations before us in Committee?

Gerry Sutcliffe (Labour, Bradford South)

The Secretary of State is a hard taskmaster and is optimistic about what can be achieved within a framework. He has asked us to speed the process up as much as we can.

The Bill is taking broad powers to provide eligible fathers with an additional period of paternity leave for a maximum of 26 weeks, some of which will be paid if certain criteria are met. At present in the Bill, for a father, or partner of an adopter, to receive additional statutory paternity pay, he must have satisfied certain criteria relating to length of service and earnings.

In addition, the child’s mother or adopter must have returned to work, have been entitled to statutory maternity pay, maternity allowance or statutory adoption pay, and have some of that entitlement remaining at the time of their return to work. As we have said, the detail will be provided in the accompanying regulations and we shall consult on the outstanding details of the policy early in the new year.

As additional paternity leave and pay is a new concept, we want to ensure that we alleviate any concerns and deliver a straightforward scheme that minimises the burdens on business, while offering more choice and flexibility to parents and, ultimately, a scheme that works.

We agree with hon. Members that the House should have the opportunity to consider the detail in the additional paternity leave and pay regulations. For that reason, we have made those provisions subject to the affirmative procedure. Paragraph 22 of schedule 1 amends section 176 of the Social Security Contributions and Benefits Act 1992 to provide that regulations made under new sections 171ZEA to 171ZEE of that Act, relating to additional statutory paternity pay, are to be made by the affirmative procedure. That covers regulations made under the powers set out in clauses 6, 7, 8, 9 and 10. Paragraph 43 amends section 236 of the Employment Rights Act 1996 to provide that regulations made under new sections 80AA and 80BB of that Act are to be made by the affirmative procedure. That covers regulations made under powers conferred by clauses 3 and 4 and also covers clause 5, although amendments to that clause have not been tabled.

On clause 12, many hon. Members will know that legislation on flexible working was fully debated as part of the passage of the Employment Act 2002. At that time, it was agreed that the procedural requirements would be subject to the affirmative procedure, while the eligibility, complaints and remedies would be subject to negative procedure. In consequence of this Bill, we intend only to amend the eligibility regulations. It is therefore appropriate that such amendments should be made by negative procedure.

I fully recognise the spirit behind the amendment and the Committee’s desire to discuss and help shape the regulations. Our record in developing the right to request flexible working, from the original taskforce to the recent work and families consultation, shows our commitment to full consultation and debate. We always consider the needs and views of all interested parties, whether they be unions, employers, employees, parents’ groups or carers’ groups. Of course, we welcome and encourage the views of Members of Parliament.

The changes to the regulations will be subject to a full and extensive consultation, in which I hope everyone here will participate. I hope to publish the consultation early in the new year and we shall discuss it extensively with all the interested parties: businesses—both large and small—and their representatives, and carers and carers’ groups.

Norman Lamb (Liberal Democrat, North Norfolk)

I am grateful to the Minister for confirming that the consultation will start in the new year. What is the time scale for completing that and for tabling the draft regulations?

Gerry Sutcliffe (Labour, Bradford South)

As I said, the consultation usually takes about 12 weeks; that is the recognised procedure that we try to adopt, and we shall try to meet that timetable. Then we shall need time to consider the consultation; we shall then bring forward the regulations. We could be talking about 16 or 17 weeks for the regulations to be applied.

In light of my explanations about the need to have discussions, I hope that the hon. Member for North Norfolk feels that I have set out the position on the procedures that will be used and I ask him to withdraw his amendment.

Norman Lamb (Liberal Democrat, North Norfolk)

I am grateful to the Minister for clearing up the confusion caused on Second Reading, when we got different answers at different times from the Secretary of State and the Minister.

Gerry Sutcliffe (Labour, Bradford South)

May I point out that I did not answer when the hon. Gentleman asked me the question?

Norman Lamb (Liberal Democrat, North Norfolk)

It is good of the Minister to admit his failure to answer my question on Second Reading. None the less, we ended that debate in some confusion about the process. The Minister has cleared that up and I beg to ask leave to withdraw the amendment.

Eleanor Laing (Conservative, Epping Forest)

Can the Minister confirm that the regulations will be put before the House using the affirmative resolution procedure, so that there will be an opportunity for us to consider them?

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to have another opportunity to explain the position. I do not think that there was any confusion on Second Reading. The Secretary of State outlined the procedures to which the affirmative and negative procedures will apply. I hope that when Opposition Members read their Hansard they will know which procedures apply to which clauses.

Norman Lamb (Liberal Democrat, North Norfolk)

I beg to ask leave to withdraw the amendment.

Clause 5 - Rights during and after additional paternity leave

Gerry Sutcliffe (Labour, Bradford South)

I want to say a few words on the clause. It is important that fathers and adopters who take additional paternity leave are protected whilst on that leave and after they have taken it. Current legislation on maternity and paternity leave provides protection for employees during and after taking any leave entitlement. Section 80C of the Employment Rights Act 1996 provides for regulations to be made to ensure that a person absent on paternity leave is entitled, for such purposes and to such extent as may be prescribed, to benefit from the terms and conditions of employment that would have applied had he not been absent. It also provides that an employee on paternity leave is bound by obligations arising under those terms and conditions for such purposes and to such extent as may be prescribed. He is also entitled to return to a job of a kind prescribed in regulations.

The clause amends section 80C to allow comparable regulations to be made in respect of terms and conditions applying during additional paternity leave, whether following birth or adoption, and in respect of rights of return from additional paternity leave. That will encourage employees to feel confident about taking such leave entitlements and ensure that there is no adverse treatment of fathers or adopters who take advantage of the new leave right. We wish to consult further on the exact terms and conditions to be applied and what the right of return will be, but it is envisaged that they will follow the provisions that apply to either ordinary or additional maternity leave.

Clause 7 - Entitlement to additional statutory paternity pay: adoption

Gerry Sutcliffe (Labour, Bradford South)

I beg to move amendment No. 18, in clause 7, page 6, line 11, leave out ‘adoption’ and insert ‘paternity’.

This Government amendment is designed to correct an error in the drafting of the Bill. Clause 7(1) refers to “additional statutory adoption pay”, but it should read additional statutory paternity pay. In the case of an adoption, it will allow the eligible partner of an adopter to receive additional statutory paternity pay.

Gerry Sutcliffe (Labour, Bradford South)

To slow the pace down a little, I should like to speak to clause 7.

In response to the growing demand for fathers to have greater opportunities to care for their child and have the option to be the primary carer, the Government are committed to introducing new legislation to provide parents with more choice and flexibility in caring for their children during the first year of the child’s life. Provisions have been made for adoptive parents to enjoy the same rights as birth parents during the first year of the child’s placement for adoption. The introduction of a new right for partners of adopters to take an additional period of paternity leave will provide adoptive parents with that. Although provisions are being taken to allow partners up to a maximum of 26 weeks’ additional paternity leave, we wish to take powers to allow part of this period to be paid.

Clause 7 inserts new section 171ZEB in part 12ZA of the Social Security Contributions and Benefits Act 1992. The new section will allow the Secretary of State to make regulations entitling employees who satisfy certain conditions to additional statutory paternity pay following the placement of a child for adoption, as set out in subsection (1). Additional statutory paternity pay will be paid by employers who can recover most or all of it from the state, and it will be administered by employers in the same way as statutory paternity pay.

Subsection (2) provides for conditions that should be satisfied in order for someone to be entitled to additional statutory paternity pay. The person will be the partner of a person with whom a child has been placed for adoption—an “adopter”—or, if the child is jointly adopted by a couple, the member of the couple who does not take statutory adoption pay in respect of the adoption. Those conditions include the relationship with the child and the child’s adopter, the detail of which would be set out in regulations, and the employee’s employment status and earnings, the detail of which would again be set out in regulations.

Subsection (2) provides also for conditions that the adopter must meet for the partner to be entitled to additional statutory paternity pay: the adopter should have been entitled to statutory adoption pay and have some of that entitlement remaining, and they must have taken action that is treated as returning to work. That is set out in subsection (2)(f).

The regulations will set out exactly what constitutes return to work. The aim of this provision is to ensure that there is only one payment stream and only one partner off work to care for the child at any time. It will be the choice of the adopter if he or she wishes to return to work and when he or she does so.

The intention is that a partner would be able to receive additional statutory paternity pay only for the remainder of the period during which the adopter would have been entitled to statutory adoption pay had they not returned to work. For example, an adopter returning to work after 30 weeks of statutory adoption pay would enable an eligible partner to take nine weeks paid additional paternity leave. A partner would still be able to take unpaid additional paternity leave for a maximum of 26 weeks until the child’s first birthday.

The intention is that by the end of this Parliament we shall extend statutory adoption pay to 52 weeks from the 39 weeks that will be in place in April 2007. That would mean that under the same scenario, a partner would be entitled to up to 22 weeks paid additional paternity leave.

There has been a growing request for legislation to provide for circumstances in which the child’s mother dies. We have taken the opportunity to include in this clause, at subsection (3), a provision to allow some of the conditions in subsection (2) to be excluded or modified if the child’s adopter dies, so that the partner could take a longer period of paid leave. Again, we shall consult on the regulations.

Standing Committee A

Clause 8 - Entitlement to additional statutory

Gerry Sutcliffe (Labour, Bradford South)

Thank you, Mr. Forth. It is a pleasure to welcome you to the Chair. I look forward to your keeping us in order this evening. I suspect that it is far better for you to be in the Chair than on the Opposition Benches.

Clause 8 inserts a new section 171ZEC in part 12ZA of the Social Security Contributions and Benefits Act 1992, which makes further provision about a person's entitlement to additional statutory paternity pay whether in relation to birth or adoption. Subsections (1) and (2) provide that the employee needs to give notice in writing if required by the employer of the date from which he expects liability for payment of additional statutory paternity pay to commence and the date on which he expects it to end. The time by which this notice must be given will be set out in the regulations and is something that we will be consulting on further.

Mark Prisk (Conservative, Hertford and Stortford)

Would the Minister tell the Committee when he expects those draft regulations to come forward? He will know that, on Second Reading, the Secretary of State for Trade and Industry made it quite clear that if it was within his power, he would try to make sure that we were told.

Gerry Sutcliffe (Labour, Bradford South)

The hon. Member for Hertford and Stortford (Mr. Prisk) missed the admonishment I received this morning. I pointed out that the Secretary of State is an optimistic and hard taskmaster in getting Ministers to deal with Bills going through Committee. His was an aspiration that I will not be able to meet. I explained to the Committee the process of how the draft regulations will be developed following full consultation with stakeholders, including small businesses, as I was asked to include this morning. I hope that we covered that point. I am sure that when the hon. Gentleman reads Hansard, he will understand the full explanation that I gave to the Committee this morning.

Initial thoughts are that the notice period will be two months, as this will follow changes that are being made to the notice period required in the case of a mother on maternity leave returning to work early, which will now be two months. To keep matters as straightforward as possible, the intention is to try to keep notification periods the same so that the father is required to notify his employer of his intention to take leave at the same time as the mother is required to notify her employer of her return to work.

Subsection (3) provides power for the Secretary of State to deal with various other matters by regulations. These include evidence of entitlement and the circumstances in which employment is to be treated as continuous for the purposes of qualifying for additional statutory paternity pay, including length of service and the amount of earnings. This will ensure that the scheme is robust and that there are clear requirements for both employer and employee.

Question put and agreed to.

Clause 8 ordered to stand part of the Bill.

Clause 9 - Liability to make payments of additional statutory paternity pay

Eleanor Laing (Conservative, Epping Forest)

I beg to move amendment No. 22, in clause 9, page 8, line 9, leave out from 'of' to end of line 22 and insert

'the Commissioners for Her Majesty's Revenue and Customs'.

Eric Forth (Conservative, Bromley and Chislehurst)

With this it will be convenient to discuss the following: New clause 2—Administration of statutory leave payments—

'The Secretary of State shall make regulations providing that any employer employing fewer than 50 persons may transfer to the Secretary of State responsibility for the administration of payments to that person's employees of—

(a) statutory maternity pay,

(b) adoption pay,

(c) additional statutory paternity pay, and

(d) ordinary paternity pay.'.

New clause 6—Payment of statutory maternity pay—

'An employer may opt to hand payment of statutory maternity pay back to her Majesty's Revenue and Customs.'.

New clause 7—Liability to make payments of statutory maternity pay—

'(1) The liability to make payments of statutory maternity pay is a liability of the Commissioners for Her Majesty's Revenue and Customs.

(2) The Secretary of State may by regulations specify circumstances in which liability for the payment of statutory maternity pay is to be a liability of any person of whom the person entitled to the payments has been an employee as defined by relevant legislation.'.

Eleanor Laing (Conservative, Epping Forest)

May I say on behalf of the Opposition what a pleasure it is to welcome you, Mr. Forth, to the Chair this afternoon?

Amendment No. 22 is a probing amendment to give the Committee a chance to consider the role of the commissioners of Her Majesty's Revenue and Customs in this process. At present, clause 9 suggests that liability to make payments of additional statutory paternity pay under section 171ZEA or 171ZEB should be liability of the employer. We suggest that instead it should be a liability of the commissioners for Her Majesty's Revenue and Customs. Additional paternity pay will be paid at the statutory flat rate. Therefore, it would be simpler for Her Majesty's Revenue and Customs to deal with the payments on a similar basis to that of maternity allowance rather than statutory maternity pay with its earnings-related element. It was argued that because of that earnings-related element, the Revenue and Customs should not deal with it, but this is not the same as statutory maternity pay. It is additional paternity pay, and as it is at a flat rate, the administration should be simpler. I therefore argue that Revenue and Customs should take responsibility for statutory paternity pay rather than that additional burden being placed on employers.

In our debates on this and other Bills in the last few weeks, the Minister responsible for women and equality has heard me say many times that we should not put too great a burden on small businesses. It is bad enough to require the administration of the Government's tax collection and benefit payments by large employers, which have human resources departments to deal with that sort of thing, but much is now being asked of small businesses, which are not set up to deal with the complications of maternity and paternity pay and allowances and, as I said in a debate on an earlier clause, the tax credit scheme.

The Minister told my hon. Friend the Member for Hertford and Stortford that the difference in cost between the public sector—the Government or Government agencies—administering a scheme and small businesses doing so was enormous. It is about £75 million compared with £3 million. How can it cost the Government £75 million per annum, but the estimated cost is only £3 million when small businesses carry out the same administrative service for their employees? The figures are not even in the same ball park, but the burdens being put on small businesses are enormous.

The amendment proposes that instead of requiring much more administrative help for the public purse from small businesses, the commissioners for Her Majesty's Revenue and Customs should provide it on behalf of the Government. The Minister will explain why the Government would prefer it the other way round, but it is a matter that must be probed further.

Amendment No. 22 is to clause 9, but the principle applies to several parts of the Bill. Why should small businesses do the Government's work in collecting taxes and paying benefits? If they do it, why does it cost 5 per cent. of what it would cost the Government to do the same thing?

Alan Reid (Liberal Democrat, Argyll and Bute)

It is the first time I have served under your chairmanship, Mr. Forth. I have observed your work in the House in what could be described as your poacher role, so I look forward with pleasure and interest to seeing you in the gamekeeper role.

I wish to speak in favour of new clause 2, which would transfer responsibility for the administration of payments for statutory maternity pay, adoption pay, additional statutory paternity pay and ordinary paternity pay from a person's employer to Her Majesty's Revenue and Customs.

I welcome the Bill, which is good not only for employees but for employers. However, as with many of the good things in life, there is a downside, namely the extra burden of administration that the Bill will place on employers, especially small businesses. We touched on that matter earlier, and Ministers conceded that a greater burden falls on small employers who are coming across new working procedures for the first time. A big employer will have large human resources and payroll departments that can easily deal with automated processes. A small employer will be faced with working out all the procedures the first time that someone claims additional paternity pay.

The procedures are complicated, and they will become more so with the introduction of additional paternity pay because the mother and father may work for different employers, and that will introduce an extra level of complexity. Like the hon. Member for Epping Forest (Mrs. Laing), I was amazed to hear the Minister's earlier claim that there was a huge difference between the cost of the Government running that part of the payroll, and that of small employers. One would have thought that it would be much cheaper for the Government because they would benefit from economies of scale.

New clause 2 states that companies with fewer than 50 employees should be given the choice of running that part of the payroll or of transferring it to Her Majesty's Revenue and Customs, which would be able to run it more easily. That could represent a quid pro quo whereby the Government issue extra regulations to which employers must comply, but they agree to take on that part of employers' administration.

Peter Bone (Conservative, Wellingborough)

Perhaps I should start by referring hon. Members to my declaration on the Register of Members' Interests as a small business person, at least in the past tense. I understand the need to administer these arrangements, but I do not understand the need for the burden to fall on small business people.

I can remember my time in small business, when Government regulation seemed to take up more time than the running of the business. If the new clause is rejected, will the Minister consider the American view, whereby small businesses are asked to implement regulations, but make a payment that is equal to the amount of energy and time that that takes up? I cannot believe that there is such a huge gap between the Government's cost, and that of small businesses. I suggest that the Government cost has been very accurately worked out, but, when working out the small business cost, they have disallowed time and energy, and worked it out on a totally different basis. If the cost will be £75 million, I suggest that that, as far as it relates to small businesses, is given back.

Mark Prisk (Conservative, Hertford and Stortford)

I would like very much to underscore the points raised by my hon. Friend the Member for Epping Forest and other hon. Members. There seems to be an interesting variance on the question of the cost of administration. My hon. Friend the Member for Wellingborough (Mr. Bone) highlighted one possible explanation for that, namely that the Government might just have got their figures wrong on the administrative cost of the measures to businesses.

I am concerned about the accuracy of the figures before us. The Minister knows that I have an element of pedantry in me when it comes to the costing of regulatory impact assessments. I make no apology for that because it is important that we have the ability and intention to scrutinise the smallest detail. To a small business, it is not the smallest detail; it may be the difference between being able to secure its livelihood, and not being able to survive in the current economic climate. I hope that we shall be able to explore in great detail the actual variance of cost and what the basis of that assumption is.

May I turn to the underlying point that is at the heart of the amendment before us and the new clause that has been referred to? That is the issue of the time involved. It is rare for regulatory impact assessments to reflect the maxim in business that time is money. I appreciate that in politics, that may seem a strange commodity, but it is true. In particular in small businesses, time spent filling in forms is time not spent doing business. Time spent complying with Government is time not spent trying to ensure that the business generates profit—some of which is used to meet the costs of paying employees—and that it is able to grow, and pay the taxes that pay for those of us who work in the public sector.

My concern is twofold. First, there is the question of productivity. The amendment relates to the principle. We have seen how this country's productivity has declined: it has dropped from fourth in international leagues to 13th. One of my concerns, and the reason why I am happy to speak in support of the amendments, is that I genuinely believe that there is a strong case that, if the principle underlying the amendments were adopted, that would help us to restore our position in the productivity league.

Secondly, the Bill was introduced by the Secretary of State on Second Reading as being a matter of fairness, whose purpose was to get the balance between work and family life correct. My concern is that the family life of the small business owner is diminished by many of the burdens that we are discussing in this Committee. In particular—I may have mentioned this on Second Reading, but I have no hesitation in referring to it again—the Federation of Small Businesses referred to the fact that the average small business today spends 28 hours per month simply complying with existing Government regulations, never mind what is before us in the clause and the amendments that we are considering today. My concern, and the reason why I am supporting the amendments, is that that figure will be added to. Members of the Committee will realise that 28 hours for every working month for every small business in this country is a large number of hours. Given that this is a Bill about work and families, I am concerned that family time, for either a mum or dad who is running a business, is going to be small.

Eric Forth (Conservative, Bromley and Chislehurst)

Order. Fascinated as I am by the hon. Gentleman's exposition, I was under the impression that this clause is about paternity pay, and that the amendments and new clauses refer to that. Perhaps the hon. Gentleman could focus, laser- like, on paternity pay instead of broadening the argument as I fear he might be tempted to do.

Mark Prisk (Conservative, Hertford and Stortford)

You are quite right, Mr. Forth. You correct me for referring to mothers. I am solely concerned here with paternity pay, not the maternity aspects. When it comes to new clauses 6 and 2, I hope that the Minister will understand my concern about the administration of statutory maternity pay and statutory paternity pay, which is in new clause 2. I hope that he will reassure us that the time involved in this process will not further diminish the family life of those who own the small businesses about which most of us are concerned.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to the hon. Member for Epping Forest for tabling her amendments and new clause, as they give us the opportunity to explain the Government's thinking on direct payments and explain how we set about considering whether that was an appropriate method.

The Government are committed to delivering the work and families legislative package in ways that balance the needs of children, families and employers. This morning I tried to explain why that balance is vital. In order to achieve it, we considered a range of issues that affect employees and employers, and we committed at the time of the pre-Budget report of 2004 to consider direct payments as one of the possible ways to ease employers' administration burdens of leave and pay. After careful analysis and consultation, the costs of the direct payment scheme were estimated at up to £75 million in set-up costs and £50 million in annual running costs, which the Government concluded would have been out of all proportion to the benefits, and would represent neither good value for money nor a significant saving for employers. The benefit for employers was estimated to be around £1 million per year, of which only around £400,000 would accrue to small employers.

Eleanor Laing (Conservative, Epping Forest)

With all due respect, will the Minister repeat those statistics? I was trying to take them in. He has just told us how much it would cost the public sector and what would be the benefit to small businesses. If he would not mind repeating them we would perhaps be able to grasp the point better.

Gerry Sutcliffe (Labour, Bradford South)

Indeed, I will repeat them and if it helps the hon. Lady I will put them in writing too to explain our background thinking.

I said that the costs of the direct payment scheme were estimated to be up to £75 million in set-up costs and £50 million in annual running costs and I said that the benefits for employers were estimated to be around £1 million per year, of which only £400,000 would accrue to small employers. So, in order to consider and quantify the potential costs and benefits as fully as possible, as well as the practical implications for employers of a direct payment scheme, HM Revenue and Customs convened an ad hoc advisory group of payroll experts, who were representatives of large and small employers, payroll bureaux and software developers. HMRC's own analysts also carried out extensive analysis.

I will deal first with the practical implications of a direct payment scheme. It soon became clear during consultation discussions that because SMP, SPP and so on are wage replacements, subject to the full range of payroll deductions and paid net, direct payment would mean HMRC becoming a temporary ''payroller'' for the SMP and so on of the employees of potentially any employer in the country, taking off the full range of payroll deductions. The employers would not lose all their tasks and responsibilities around these payments. They would remain responsible for making earnings-based contributions like employers' national insurance contributions and employers' contributions to occupational pension schemes, and for completing periodical returns like the employer's annual return.

For that to work properly for both employers and HMRC there would need to be a potentially complex two-way information exchange, which could impose new burdens on employers. Employers would have to provide HMRC with wide-ranging data, to high standards of accuracy and to tight time limits to enable HMRC to take over the payroll functions associated with those statutory payments and keep them up to date. And employers would still need information from HMRC to fulfil their obligations and take back the payroll at the end of the direct payment period.

Many people, including payroll experts, did not believe that such complex information exchange could take place without error—and error on a large scale-—affecting employees and their employers. This would create a new role for employers, dealing with the consequences of errors. In short, while at first glance direct payments might appear to relieve employers of an administrative burden, in practice we believe that they would involve for employers a mixture of tasks removed, tasks retained and new tasks.

HMRC tried to quantify the impact on employers. Building on work done by the HMRC ad hoc consultation group on the direct payment process, HMRC analysis has now estimated that a direct payment scheme would only provide net savings of about £1.1 million to employers, of which only about £400,000 would accrue to small employers. Out of this net benefit employers would still need to deal with the consequences of errors in the information exchange.

As I said, HMRC costs for implementing direct payment are estimated to be up to £75 million for the set-up and £50 million per annum for the ongoing costs. Full analysis of these figures has been published in a technical note on the HMRC website, the address of which the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Sheffield, Heeley (Meg Munn), read out to the Committee this morning. Making the scheme optional, so that only those employers who wanted to make use of it could do so, would not have a substantial bearing on HMRC's set-up costs. Fewer employers would be using the scheme, so the employer savings would be reduced. That would represent poor value for money for the taxpayer.

Clearly there would have been little point in proceeding with a scheme that, although superficially attractive, would have had significant cost implications for the taxpayer without offering any significant savings for business. I hope that with that explanation hon. Members will understand why direct payment is not the appropriate route. Hon. Members referred to the impact of accumulative effects of employment legislation on small business. I do not wish to step too far outside my remit, but the Bill identifies other areas in which we can support small businesses by making matters easier and simpler.

Peter Bone (Conservative, Wellingborough)

Can the Minister deal with my earlier point? If the direct payment system is not acceptable, will he examine the possibility of refunding the employer with the full cost of administering the scheme?

Gerry Sutcliffe (Labour, Bradford South)

As my hon. Friend pointed out, there are certain benefits for small employers, such as the existing refund to small companies of national insurance contributions at 104.5 per cent. There are opportunities for small businesses to benefit from what the Revenue is trying to achieve. I refer hon. Members to the Government's efforts to support small businesses with the launch of Employer Direct, which is an online service aimed at supporting companies, especially small businesses, in administering employment legislation.

We shall continue to examine these matters because it is not in the Government's or anyone's interest to burden small businesses to the extent that the schemes do not work. That is why I said, in the contextualisation of this matter, that we must strike a balance. We have been asked by a number of organisations that represent employees to go much further on support for working parents. We must balance that with calls from the CBI, which was particularly concerned about the fact that direct payments had not been introduced. We have looked at that matter very seriously but the figures do not stack up and we do not think that it is in the best interests of employers or the Revenue.

Mark Prisk (Conservative, Hertford and Stortford)

Without wishing to stretch your patience too far, Mr. Forth, is there any indication that, in the context of that experience, the Minister intends to examine the broader payroll aspects? A brief answer would be helpful.

Gerry Sutcliffe (Labour, Bradford South)

Brief answers are always dangerous. I am prepared to say that we have asked the CBI and other organisations to examine other measures that may be of assistance to employers, especially small employers, and we will argue the case with the Revenue for reducing that burden.

Eleanor Laing (Conservative, Epping Forest)

They say that one can do anything with statistics. I have rarely seen such a stark use of statistics to prove a point. If the Minister had said that the cost-benefit analysis showed that taxpayers may have to pay £5 million a year to the benefit of small businesses of only £1 million a year, I might have nodded and thought that that was fine. However, this is so huge that it becomes difficult to believe. I am not suggesting for a moment that I do not believe what the Minister has said; I have every faith in the figures that he has provided. However, he is correct to say that the CBI is concerned about the issue of direct payments because it represents employers throughout the country.

The CBI is able to analyse the effect that legislation will have on small, medium and large businesses. I said on Second Reading that my main concern was to make the legislation work. We all wish to see the legislation work, but everyone must have confidence in the system. Our discussions suggest that many businesses will resent having to do more paperwork and administrative work in order to administer this measure. Most people in the United Kingdom are employed by small, not large businesses. What will happen is that small and medium-sized businesses will not employ women of child-bearing age. An employer who has to choose between three men cannot tell which of them is likely to become a father—

Meg Munn (Labour, Sheffield, Heeley)

All of them.

Eleanor Laing (Conservative, Epping Forest)

The Minister says all of them, and that is indeed the case. The Bill will backfire. The hon. Ladies are all raising their eyebrows; this morning they were giggling when I was speaking, but with the exception of the hon. Members for Cardiff, North (Julie Morgan) and for Burnley (Kitty Ussher), they have not said anything.

The hon. Ladies have faith in the fact that if something is written in law, it happens. But it does not happen just because it is written down. The law, when it is put into action, must work, and if too many burdens are put on small businesses they will find every way they can not to employ women who might have children. That is what it comes down to. I know that we are also discussing adoption and paternity pay, but the main issue is maternity. I shall give way to the Minister in a moment. [Interruption.] I shall give way to the hon. Member for Kingston upon Hull, North (Ms Johnson) if, instead of raising her eyebrows, she would like to say something.

Diana Johnson (Labour, Kingston upon Hull North)

I have to say something on that point. Are there not more women in the work force now than ever before? How does the hon. Lady explain that away? She seems to imply that because of the legislation introduced since 1997—I assume that that is what she is referring to—employers do not wish to employ women. There are more women in the work force; that is a fact.

Eric Forth (Conservative, Bromley and Chislehurst)

Order. We are getting into a bit of gender confusion. May I ask members of the Committee to concentrate on clause 9 and its amendments?

Eleanor Laing (Conservative, Epping Forest)

Thank you, Mr. Forth. I am happy to concentrate on clause 9, as you request, before I give way to the Minister. The hon. Lady is an expert in getting hold of the wrong end of the stick.

Gerry Sutcliffe (Labour, Bradford South)

To return to the subject of direct payments, the hon. Lady said something earlier about not trusting the figures, or the figures from Customs seeming remarkable. I point out that Customs did those calculations with an ad hoc group from small and larger businesses. It was said with the cumulative agreement of people round that table that direct payments would be unattractive to employers.

Eleanor Laing (Conservative, Epping Forest)

I accept the Minister's point. In challenging the enormous gap between the costs and benefits that he said would arise directly from new clause 6, I am not suggesting that I do not believe the Minister's figures. However, the gap between one side and the other is remarkably stark. I will not lose the opportunity to put it on the record that we are concerned about small businesses. Whatever the hon. Ladies on the Labour Back Benches might say, or not say—[Interruption.]

Sadiq Khan (Labour, Tooting)

You did not have the pleasure of hearing the rant this morning about interventions, Mr. Forth. The hon. Lady complained in her earlier speech about lack of sleep and I was simply wondering whether that would explain her speech this afternoon.

Eric Forth (Conservative, Bromley and Chislehurst)

Order. Whatever comments may have been made this morning, similar comments will not be acceptable this afternoon. I ask all members of the Committee please to return to clause 9.

Eleanor Laing (Conservative, Epping Forest)

Thank you, Mr. Forth. The hon. Member for Tooting (Mr. Khan) is exceptional in his rudeness in Committee. I am not suffering from lack of sleep. I made the point that children sometimes stay up all night, so flexibility in employment is extremely important, as many members of the Committee understand, and flexibility in employment practices is precisely the matter under consideration in the Bill.

However, to return precisely—as you rightly say we should, Mr. Forth—to clause 9 and new clauses 6 and 7, I accept the Minister's figures, but I am still concerned about the burden on small businesses. If it would cost such an enormous amount to administer the schemes in the public sector, it is hard to believe that it will cost such a minute amount to administer them in the private sector, but of course I accept the Minister's figures. I have made the point many times during consideration of the Bill that Opposition Members are the guardians of taxpayers' money, so if the Minister tells me that new clauses 6 and 7 and amendment No. 22 would mean £75 million in set-up costs, followed by £50 million per annum in running costs, I must of course beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 ordered to stand part of the Bill.

Clause 10 - Additional statutory paternity pay:

Eric Forth (Conservative, Bromley and Chislehurst)

With this it will be convenient to take Government amendment No. 19.

Gerry Sutcliffe (Labour, Bradford South)

The amendment is to paragraph 20 of schedule 1, which relates to clause 10. I shall speak about the amendment shortly. I am grateful that the clause and the amendment can be discussed together.

When introducing a provision to allow a father to take an additional period of leave that can be paid if certain criteria are met, there is a requirement to set the rate and period of pay. As with existing provisions for statutory maternity pay, statutory adoption pay and statutory paternity pay, the rate and period will be prescribed in regulations. The clause provides for the regulations to prescribe the rate at which, and the period for which, additional statutory paternity pay is payable. It inserts proposed new section 171ZEE in the Social Security Contributions and Benefits Act 1992.

Subsection (1) provides for regulations to prescribe the rate at which additional statutory paternity pay is payable. That can be a fixed rate or can be linked to an earnings-related weekly rate. That mirrors current legislation on statutory paternity pay, the rate of which is £106 a week or 90 per cent. of the father's average weekly earnings if that is less than the fixed rate of £106. Maternity allowance and statutory adoption pay are also paid at that rate, as is statutory maternity pay after the first six weeks. No decision has been taken on what the rate will be for additional statutory paternity pay. However, it is likely to mirror the rate of statutory maternity pay, statutory adoption pay and statutory paternity pay at the time of the scheme's introduction.

Subsections (2) and (3) provide for regulations to specify the period for which additional statutory paternity pay is payable. The period will begin with the day on which the child's mother or the adopter is treated as returning to work, except in exceptional circumstances in which the child's mother or adopter has died.

Subsection (4) provides for the maximum pay period to be prescribed. The intention is that the period during which the father receives pay will be equivalent to the remainder of the mother's entitlement to statutory maternity pay or maternity allowance, or the adopter's entitlement to adoption pay. Subsection (4) also provides that the period of pay will not extend beyond 12 months from the relevant date, which is the date of the child's birth or the date on which the child was placed for adoption, as set out in subsection (5). That will ensure that the provision for additional paternity leave and pay does not extend beyond the first year of the child's life or the first year following its placement for adoption, which is the policy intention.

Subsections (6) and (7) ensure that additional statutory paternity pay is payable only for the purpose of caring for the child, and set out that if a person works for part of a week, they will not be paid additional statutory paternity pay except in cases prescribed by the regulations. As with maternity leave and pay, we intend to allow employees to work, if they want to, in certain limited circumstances and for a limited number of days during the additional paternity period without losing pay for that week—for example, to attend special training days—to encourage the employee and employer to keep in touch and to manage the employee's absence from work in a way that benefits both the employee and their employer.

Subsection (8) provides that, where additional statutory paternity pay has not been paid as a result of non-compliance with subsection (6) and/or subsection (7), the pay will have ended at the end of the previous week.

Subsection (9) will enable employers to calculate additional statutory paternity pay at one seventh of the weekly rate in circumstances in which that will help them to align the employee's additional statutory paternity pay within his usual pay period.

Many employees are paid their contractual pay in periods that are not divisible into an exact number of weeks. Many, for example, are paid per calendar month. Employers have told us that that creates problems, as they have to pay statutory maternity pay, statutory adoption pay and statutory paternity pay in patterns of weeks that do not relate to the employee's usual pay period.

As well as being unclear for both employees and their employers, we understand that the arrangement leads to an increase in inquiries for employers and often requires them to produce separate payment schedules for employees who receive statutory maternity pay or statutory adoption pay. We have included subsection (9) to prevent the problem from occurring for fathers who take additional statutory paternity pay.

Subsection (10) clarifies the definition of a week and when a week begins for the purposes of the period of pay. The current definition used in relation to the pay period for statutory maternity pay has meant that the period of seven days begins on a Sunday and runs to a Saturday. We are seeking changes to that definition in respect of statutory maternity pay. We want to ensure consistency with that and with statutory adoption pay by providing that additional statutory paternity pay can begin on any day of the week. That will enable the start of the additional statutory paternity pay and leave periods to be aligned, and it will allow for additional statutory paternity pay to be paid for a specified number of weeks beginning on any day of the week. That will make the additional statutory paternity pay and leave periods more straightforward and understandable for both employers and their employees.

Amendment No. 19 amends the Social Security Contributions and Benefits Act 1992 so that the general definition of a week in the paternity pay provisions, which refer to a week as a period of seven days beginning with a Sunday, does not apply to additional statutory paternity pay. Without the amendment, the additional statutory paternity pay will have to start on a Sunday. The amendment is therefore technical and consequential, so that the provisions on additional statutory paternity pay can achieve their intended effect.

Mark Prisk (Conservative, Hertford and Stortford)

I must say that I was most impressed by the Minister's verbal dexterity, and by his colleague's ability to look awake, although I am not sure whether that was merely a front.

I want to touch on the question of keeping in touch, because that is an important point. The Minister may make the cruel assumption that this is rare, but I commend that flexibility. The British Chambers of Commerce made it clear that the opportunity for employees to be able to return to work, albeit to keep in touch with what is happening, is to be commended.

I do not intend to refer to the change to the seven-day arrangement, to which Government amendment. No. 19 refers. Again, I understand that that is a technical change, but I want to put on the record my belief that the principle of keeping in touch, and including that option in the legislation, is to be commended.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful for those remarks on keeping in touch, which I believe is a key element to the success of the scheme for all concerned. It will give the employer some certainty in their relationship with the employee, and it will give the employee the opportunity to keep in touch with what is going on in the business. That is important particularly because of the fast-changing nature of business and the need for businesses to react to market conditions daily, and sometimes hourly.

I hope that the Committee will support the amendment and the clause.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Clause 11 - Leave and pay related to birth or adoption: further amendments

Meg Munn (Labour, Sheffield, Heeley)

It is good to see you in the Chair, Mr. Forth. I echo the comments of my hon. Friend.

The clauses introduces schedule 1 that makes a variety of changes to other legislation. It amends references to statutory paternity leave and pay so that they may be distinguished more clearly from additional paternity leave and additional statutory paternity pay; introduces any-day start day for statutory maternity pay and maternity allowance; allows for a daily calculation of a variety of statutory payments; provides regulation-making powers in respect of keeping-in-touch days; makes consequential amendments to primary legislation dealing with procedures during additional paternity leave; and allows for regulations about additional paternity leave and additional statutory paternity pay to be made under the affirmative resolution procedure. Clause 11 also provides for the terms ''statutory paternity pay'' and ''ordinary statutory paternity pay'' to be read as references to the same statutory payment in certain circumstances.

Question accordingly agreed to.

Clause 11 ordered to stand part of the Bill.

Schedule 1 - Leave and pay related to birth or adoption: further amendments

Mark Prisk (Conservative, Hertford and Stortford)

On a point of order, Mr. Forth. I know that you share my concern, but I made inquiries this morning about schedule 1 and the Acts that it seeks to change. I asked the Table Office whether copies were available of the Social Security Act 1989, the Finance Act 1989, the Social Security Contributions and Benefits Act 1992, to which there are significant changes stretching over two and a half pages of the new proposals, the Social Administration Act 1992 and, the fundamental Employment Rights Act 1996, which was available. There are four or five other pieces of legislation that the schedule will amend.

I do not ask for the Committee to be suspended, as that would be inappropriate, but I ask you, Mr. Forth, to ask the Clerks why the principal Acts, which will be amended in the Committee, are not available to enable Members to cross-reference the several pages of changes.

Eric Forth (Conservative, Bromley and Chislehurst)

This issue arose as recently as last week when Mr. Speaker undertook to try to ensure that the appropriate Acts were available. The responsibility is on all members of the Committee to give as much notice as possible of requests to the Vote Office for such documents to be made available.

As a matter of principle, it is more than desirable—it is essential—that Members should have access to the underpinning legislation. In extremis, however, Members can always resort to the Library, where Acts are available and can, if necessary, be photocopied, something to which I resorted last week. I thank the hon. Gentleman for his observation.

Meg Munn (Labour, Sheffield, Heeley)

I beg to move amendment No. 20, in schedule 1, page 20, line 28, leave out 'or'.

This is a minor drafting amendment. If the Bill remains as drafted, the amended wording of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 will contain the word ''or'' too many times.

Amendment agreed to.

Question proposed, That this schedule, as amended, be the First schedule to the Bill.

Meg Munn (Labour, Sheffield, Heeley)

Schedule 1 makes a variety of changes to other legislation—the hon. Member for Hertford and Stortford has just drawn the Committee's attention to that fact. It amends references to statutory paternity leave and pay so that they may be distinguished more clearly from additional paternity leave and additional statutory paternity pay; introduces an any-day start day for statutory maternity pay and maternity allowance; allows for a daily calculation of a variety of statutory payments; provides regulation-making powers in respect of keeping-in-touch days; makes consequential amendments to primary legislation dealing with procedures during additional paternity leave; and allows for regulations about additional paternity leave and additional statutory paternity pay to be made under the affirmative resolution procedure.

Question accordingly agreed to.

Schedule 1, as amended, agreed to.

Clause 12 - Flexible working

Alan Reid (Liberal Democrat, Argyll and Bute)

I beg to move amendment No. 8, in clause 12, page 10, line 9, leave out from 'subsection (1),' to end of line 18 and insert 'delete paragraph (b).'.

Eric Forth (Conservative, Bromley and Chislehurst)

With this, it will be convenient to discuss the following amendments: No. 33, in clause 12, page 10, line 16, leave out from 'who' to end of line 18 and insert

'is disabled, elderly or has a long-term illness and in respect of whom the employee has caring responsibilities that have a substantial impact on his working life.'.

No. 9, in clause 12, page 10, line 19, leave out from 'subsection (2),' to end of line 21 and insert ', delete paragraph (d).'.

Alan Reid (Liberal Democrat, Argyll and Bute)

Flexible working, an important element introduced in previous legislation, has worked very well and I am pleased that the Bill increases the opportunities available for flexible working.

I tabled the amendments to initiate a debate on the issue, because the principle of flexibility should apply to the Bill itself so that flexible working arrangements should be made more flexible. The Bill, as drafted, puts restrictions on cases where employees would be able to apply for flexible working; they can do so, for example, where there is

''a child who has not reached the prescribed age''—

that is left to later regulations—

''or falls within a prescribed description or a person aged 18 or over who falls within a prescribed description and in respect of whom the employee satisfies prescribed conditions as to relationship.''

Rather than trying to prescribe all the circumstances in the Bill or in regulations, it would be better if they were left flexible. In these situations, it is not a guaranteed right to be given the extra leave but to be able to apply for it and for the employer to consider the application. Circumstances may arise that are not foreseen in the Bill or the statutory instruments, so it would therefore be better to leave them open.

This would not involve a burden on the employer; research on flexible working shows that the great majority of employees—81 per cent.—who made a request had it fully or partly accepted. Employers are showing a willingness to accommodate requests wherever possible. In a CBI survey, 87 per cent. of businesses surveyed reported that the existing law had either had a positive effect or made no impact on their business. It is important to allow more flexible working.

Amendment No. 33 attempts to draw a wide definition of the people who are being cared for. Amendment No. 34 was tabled on the advice of the Parkinson's Disease Society, which pointed out that the effects of Parkinson's disease on the sufferer can often vary widely in a short period of time. Present legislation means that the employee has the right to submit only one request for flexible working within a 12-month period, but those who care for people suffering from Parkinson's disease often find that the circumstances can change at short notice. It is therefore important for employees to be able to submit more than one request during the 12-month period should the sufferer's circumstances change.

I hope that the amendments will prompt a debate on making the circumstances much more flexible.

Eleanor Laing (Conservative, Epping Forest)

Clause 12 is very important because we tend to concentrate on mothers of small children when discussing flexible working, although we have been talking about paternity leave today.

It is absolutely vital that in recognising the need for flexible working practices and the need not only for families and individuals but for the economy as a whole to understand and accommodate the work-life balance, we take into consideration the position of carers. Of course, it is more difficult to identify exactly who is a carer and to have a proper definition of carers. By comparison, it is fairly simple to identify the mother, father or guardian of a small child. It is much more difficult to identify someone who has a caring role and ought to be given rights in that respect.

I repeat that this is not only about improving life for individuals and families; it is an economic imperative that everyone who is capable of working and contributing to our work force be given the chance to do so. It is unacceptable if someone who is perfectly capable of doing a particular job and who might have been doing it to the satisfaction of both employer and employee for many years suddenly can no longer do it because of family responsibilities, such as caring for someone who is ill or for someone who is elderly.

That situation is not good for anyone. It is not good for the person who needs to be looked after. It is not good for the employee, who is desperately trying to do a job and to fulfil family responsibilities. It is not good for the employer, who, instead of getting loyal service from an employee, suddenly does not get 100 per cent. concentration because the employee is so concerned about other duties in the family. It is not good for business and the economy if people are not enabled to work to the full extent of their capabilities. Most of all, it is a pretty sad situation for someone who would be capable of carrying on a job and carrying out caring responsibilities if flexibility were available.

For that reason, I disagree with amendment No. 33, proposed by the hon. Member for Argyll and Bute (Mr. Reid) on behalf of the hon. Member for North Norfolk (Norman Lamb). Again, this comes down to regulations. In the amendment, there is, quite properly, an attempt to give, in clause 12, in line 16 on page 10, the exact definition of a carer in terms of the person being cared for. However, later on, in subsection (5), the Government suggest that this is another matter that should be dealt with by regulations.

The hon. Member for Argyll and Bute has proposed perfectly reasonable words in amendment No. 33, and it would be preferable to see the regulations before we continue the debate. However, we debated that matter at great length this morning, and I know that it would be improper to return to it now. So far, the Minister has, with forbearance, been polite to me as I have admonished him on the matter, so I will not risk his ire or yours, Mr. Forth. It would have been better had we seen the regulations today, but I hope that at some future point the House will have the opportunity to consider the regulations in a Committee. We reserve the right to consider them very carefully.

Again, my concern is to make the Bill work. My concern is to allow flexibility and therefore to strike the right balance between employer and employee. But for that to happen, it is also vital to get the right balance between one employee and another. If mothers and fathers of young children are to be given special rights to request flexible working in order to balance their family responsibilities with their workplace responsibilities, so must other employees. If that does not happen, resentment builds up in the work force and people who do not have children will say, ''Why should I always do the late duty just because she has a child?'' or ''Why should I always do the early duty just because he has become a father?'' That makes for bad industrial relations and difficulties for both employees and employers. Getting the definition of a carer right is absolutely vital here.

There are many views on this issue. Some people would say, ''Sorry, if you have responsibilities outside the workplace and you want to make your first priority the fact that your parent is dying and lives 100 miles away, I do not need you in my work force any more.'' If that attitude prevails, the work force will lose some very good people. That is bad for the economy. We return to the Minister's statistics that she has quoted once and I have quoted a dozen times in the few weeks since she brought forward this information. I said earlier that one can do anything with statistics, but this is rather important.

The Minister will correct me if I am wrong, but if all the women in the UK work force today were working to the height of their abilities, doing the jobs of which they are capable rather than a part-time version of a lower grade job because they need to leave time for children or other caring responsibilities, it is estimated that annual gross domestic product would benefit by a growth of 3 per cent. That is equal to the whole of our annual trade with Germany. There would be a massive increase in GDP if all the women who could be in the work force were there working to the height of their capacities.

I say that not because I want to be a slave driver of all the women in the UK, but because I am so well aware that many women come back to work or continue working not to the extent of their capacities but because they do not have the flexibility. Hence the clause and the amendments to it are key to making the Bill work. Just for once, I do not support what the Liberal Democrats are saying in amendment No. 33. Although it would be better if we could examine the regulations today, I am sure that the Minister will give me an undertaking that we will examine them one day. I reserve the right to come back to this issue when we do.

The hon. Member for Bridgend (Mrs. Moon) made an excellent speech on Second Reading on this subject. Unfortunately, she is not a member of the Committee. She gave the example of the white lies that are told by employees in order to be away from the workplace. Everyone knows that they are white lies. The employer knows; colleagues in the workplace know that excuses are made in order to get away for very genuine reasons. It would be far better if the whole matter were honest and above board. If we face the reality that, in the stress of modern living, people have to balance family duties with work duties, that should be recognised on the face of the Bill.

Julie Morgan (Labour, Cardiff North)

I want to make a brief contribution on this part of the Bill. I do not support the amendments but it is useful to have them for the purpose of debate. This is a key part of the Bill, and those amendments aim to define a carer. It is essential to have widespread consultation on the regulations with all the concerned agencies so that we can reach as good a description as possible of what caring involves. All hon. Members know that caring is complex and that it will be difficult to define. It is important that we hold discussions with carers and with the voluntary agencies.

The definition of a carer will be the key to the success of this part of the Bill. I accept, as other hon. Members have said, that the request for flexible working has been a great success. I originally believed that it might require more statutory force, but I accept that it has worked very well. I warmly welcome the Government's extending of that right to carers.

I have a few questions linked to the amendments that I hope the Minister will address. Like other hon. Members, I have been in touch with the National Society for the Prevention of Cruelty to Children, which wants all parents of all children up to the age of 18 to be able to request flexible working. I have some sympathy with that view because, if one looks at the passage of a child's life, one sees that it is always difficult, but the teenage years are probably more problematic than when the children are very little. With a view to consistency, I would like to know the Minister's view on the NSPCC's position. The Equal Opportunities Commission believes that everyone should be able to request flexible working. Does she envisage that we could move to that position in the longer term?

Meg Munn (Labour, Sheffield, Heeley)

On a point of order, Mr. Forth. Perhaps I could seek your guidance as I understand that the hon. Member for Argyll and Bute referred to amendment No. 34, which does not belong in this group. However, I am content to respond to his points.

Eric Forth (Conservative, Bromley and Chislehurst)

We will come separately to consideration of amendment No. 34 when we have completed our consideration of this group. That will be the appropriate time for a proper debate on that amendment should the hon. Gentleman wish to initiate it.

Meg Munn (Labour, Sheffield, Heeley)

I will respond to the amendments in this group because they deal with the same aspect of the law. I thank Liberal Democrat hon. Members for tabling those amendments to allow discussion on this matter.

In 2003, we created a new right for parents with children under six, and disabled children under 18, to request flexible working. A statutory duty was placed on employers to consider seriously such a request. That right was based on existing business practice, and was introduced in the Employment Act 2002, following a lengthy consultation, including the establishment of a work and parents taskforce to examine how to accommodate the needs of parents in a way that did not compromise business efficiency.

The law targeted parents with young children, providing support at the key stages of birth and starting school. There was a narrow eligibility criteria that sought to ensure that the legislation would win support from employers. The age limit was set at 18 for parents of disabled children to recognise the distinct and particular difficulties that they often face.

The Government are seeking to build on the success of the right to request flexible working. Our goal is to support all families to find working hours that match their caring responsibilities—whether for children or for sick or vulnerable adults—in a way that enables businesses to plan effectively and manage their work force. We touched on that matter earlier. This Bill seeks the balance between extending rights for families and recognising the needs of business. In response to my hon. Friend the Member for Cardiff, North, we do not, at this stage, intend to increase the age for children. We are following a different priority: that of carers. That was the result of our consultation.

The Government's consultation, ''Work and Families: Choice and Flexibility'' asked how we could achieve our aims. The key issue that emerged from the consultation was that employers had concerns about managing requests from a wider section of the work force. We are especially mindful of the impact of any extension on small businesses. They have stressed to us that their resources to meet an increase in demand are limited. Although the CBI's research shows that small businesses are the most likely to accept requests, it also suggests that employers are finding it more difficult to accommodate requests to work flexibly. The success of the law so far has been due to the widespread support of employers, and we must be careful not to jeopardise that. The law specifies that an employee can apply to work flexibly only if the purpose of their application is to allow them to provide care for another individual.

The amendments proposed by the hon. Member for Argyll and Bute would remove those conditions, in effect enabling any employee to apply to their employer to change their working pattern. Although we agree in principle that all employees should have the opportunity to work flexibly, any increase in the scope of the legislation must be made sensibly to ensure that we do not stifle economic growth. We must consider the principles of better regulation. We are keeping a targeted approach to provide employers with the best way of managing requests. We know, on the basis of experience to date, that that is likely to stimulate many to open up flexible working to others in their work force.

The relevant amendment would define in the Bill which carers were covered by the legislation. Under the existing law, with the reference to parents of children under six, we all immediately understand who is covered by the law. We also have an understanding of the nature of the care that parents provide to their children up to that age. Extending the law to carers of adults raises a number of questions, as it is less easy to understand who will be covered by the legislation and what type of care should be covered. It is important that we clearly define who will be entitled to the new right.

Through the ''Work and Families'' consultation, we heard that the definition needs to be straightforward, easy to understand and should keep our existing light-touch and targeted approach. We will thereby expect to help those who need it most. We could define in a number of ways which carers are covered by the legislation. One approach would be to link the definition with the level of care that the carer provides. Another approach would be to link it to the person for whom the employee cares.

Amendment No. 33 would broadly link the definition to the level of care that the carer provides. It states that

''the employee has caring responsibilities that have a substantial impact on his working life.''

It would be useful to hear the views of different stakeholders on that definition, but I am concerned that the phrase

''substantial impact on his working life''

is difficult to define objectively and that it might narrow the scope of the rights. Under that definition, some employees might feel excluded, because although they might provide a great deal of care for someone, they might not think that their caring responsibilities were having a sufficiently substantial impact on their working life to warrant a request for flexible working. We need to discuss such issues further. It is right and proper that we should consult widely on the definition of carers and ensure that all those with an interest have an opportunity to air their views.

I am grateful for the opportunity to have the debate and I look forward to continuing it and involving all interested parties: carers groups—Carers UK has recognised the benefits of the Bill and welcomed it—employee representatives, businesses, both small and large, and, of course, trade unions. We hope to have a full and extensive consultation and we will publish draft regulations for consultation in the new year. I hope that everyone here will take the opportunity to comment on the consultation. I also hope that, with those reassurances, the hon. Member for Argyll and Bute will feel able to withdraw the amendment.

Alan Reid (Liberal Democrat, Argyll and Bute)

The amendments made for an interesting debate, which was the purpose of tabling them. I take heart from the Minister's promise that there will be a full consultation, followed by draft regulations and debates in a statutory instrument Committee. In the light of that, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Eric Forth (Conservative, Bromley and Chislehurst)

That brings us to amendment No. 34.

Alan Reid (Liberal Democrat, Argyll and Bute)

I beg to move amendment No. 34, in clause 12, page 10, line 22, at end insert

'(4A) If an employee described in subsection (2)(b)(ii) has made a successful application under this section, he may make a further application to the same employer for a review of the agreed flexible working arrangements within the twelve month period beginning with the date on which the previous application was made.'.

I stand corrected, Mr. Forth, and I apologise to the Committee. I thought that this amendment was being dealt with as part of the earlier group, so I spoke to it then. I shall not bore the Committee by repeating my remarks, but a brief summary is that the amendment was prompted by the fact that, under the present legislation, an employee can make only one application for flexible working within a 12-month period. In the case of many illnesses such as Parkinson's disease, the nature of the illness can change rapidly so an employee who is the carer of someone with Parkinson's disease may wish to make a different application within the 12-month period.

Meg Munn (Labour, Sheffield, Heeley)

As the hon. Gentleman has said, the amendment would introduce a change in the procedure under which an application to work flexibly can be made. It would apply only to carers. This issue was debated on Second Reading. The amendment seeks to move the debate forward, acknowledging the point made by the Secretary of State that an employer who had been unable to grant an application would be unlikely to take a different view a few months later.

The amendment seeks to allow carers of adults to apply for a review of a successful application within the twelve-month period, while preserving the existing provisions for parents of young and disabled children. We understand that the circumstances faced by many carers are different to that of parents. The condition of sick or disabled individuals can improve or deteriorate over time, and consequently the demands of caring for them change in a way that differs from ordinary child care arrangements.

We recognise that carers will at times have different needs from parents, but we do not think that it is necessary to legislate for this fact. The procedure that underpins the duty to consider flexible working was designed to encourage dialogue between employers and employees, so that they are able to discuss working patterns that suit them both. During these discussions, there is already scope for both parties to agree to have a trial period or to agree to review the arrangement at a future point. This fits with the light-touch nature of the law. Research has shown that, in practice, employers and employees often do not use the procedure, even if it applies to their circumstances; about 80 per cent. of requests are dealt with informally.

The legislation is there as a minimum standard, which gives employees the confidence to ask for that initial discussion. Our approach in encouraging flexible working has consistently balanced the needs of the individual with the needs of business. Employers, especially small employers, need to be able to manage requests and plan ahead with confidence. The law has been a success because it is clear and easy to understand for employers and employees. There is a danger that this amendment would introduce uncertainty around the operation of the law.

Employers would need to treat parents of young and disabled children differently from carers of adults. This would be confusing for all parties, and add a level of complexity that would not be welcomed. We believe that reviews and trial periods are best covered by guidance. We already cover this in our existing guidance and when we revise the guidance as a result of extending the scope of the law, we will discuss this further with stakeholders to ensure that these types of arrangements are highlighted.

I fully appreciate why the hon. Gentleman has raised these matters and the views of the Parkinson's Disease Society. Of course, we understand that in these cases situations change fairly quickly and there can be a need to respond in particular ways. We feel that there is the scope within the existing arrangements to manage that.

Alan Reid (Liberal Democrat, Argyll and Bute)

I agree that flexible and informal approaches are best, but section 80F(4) of the Employment Rights Act 1996 states:

''If an employee has made an application under this section, he may not make a further application under this section to the same employer before the end of the period of twelve months''.

I am worried that that is such a blanket ban that it seems to conflict with the flexible and informal approach that the Minister described.

Meg Munn (Labour, Sheffield, Heeley)

As I said to the hon. Gentleman, we issue guidance to assist employers. He read from the legislation, and we all know that legislation generally, and perhaps this Bill in particular, is not necessarily the most friendly and easy thing to read and immediately understand. Guidance is therefore enormously important. The guidance will cover the issues of looking at trial periods and managing that process. In producing that guidance we are committed to consulting a range of people who are interested, such as carers' organisations. I hope that the Parkinson's Disease Society will comment on it.

We understand the issues that the hon. Gentleman raises, but we do not feel that it would be sensible either to include such provisions in legislation or to make a difference between the request for flexible working by those who have children and by carers in such a way that that difference could be confusing for small businesses. I hope that, with those reassurances, he will withdraw his amendment.

Alan Reid (Liberal Democrat, Argyll and Bute)

I am still not convinced, but I realise the hopelessness of pressing the amendment today. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Meg Munn (Labour, Sheffield, Heeley)

I will be brief because we have already had some discussion on the clause. It is about supporting families who face huge challenges in balancing their home and work responsibilities. However, we also know that businesses are finding it increasingly difficult to recruit and retain the best people in the face of stiff competition and a tight labour market.

I am grateful to the hon. Member for Epping Forest for repeating my statistic. I hope that the hon. Member for Hertford and Stortford was paying attention, as he referred earlier to issues of productivity. I am sure that he will ponder on how we can do better in those areas.

The legislation that we have so far introduced, which creates the right for parents with children under six or disabled children under 18 to request flexible working has had a positive effect, with very few requests being declined. As I said, the legislation was designed to encourage constructive dialogue between employers and employees, and the success of the law so far demonstrates that that has been a key factor.

However, the incidence of provision for those with other care responsibilities is less clear. A survey by the Chartered Institute of Personnel and Development earlier this year suggested that only 4 per cent. of workplaces provided opportunities for employees to take time off to care for elderly or sick relatives. The clause therefore amends the existing legislation to allow the reason for a request to work flexibly to include caring for an adult. The eligibility criteria for carers will be specified in secondary legislation.

We are also taking the opportunity to put into regulations the age limit of a child in respect of whom a parent can request to work flexibly, although we do not intend to change the age limit. We are making no changes to the procedural aspects of the legislation.

I am grateful for the support that the clause received from both sides of the House on Second Reading. It is an important clause, which affords more choice and independence to carers, a group who face particular difficulties in balancing work and caring responsibilities.

Question put and agreed to.

Clause 12 ordered to stand part of the Bill.

Clause 13 - Annual leave

Eleanor Laing (Conservative, Epping Forest)

I beg to move amendment No. 27, in clause 13, page 10, line 33, after 'year', insert

'excluding United Kingdom public bank holidays'.

Eric Forth (Conservative, Bromley and Chislehurst)

With this it will be convenient to discuss amendment No. 16, in clause 13, page 11, line 16, at end insert—

'(h) make provision to ensure that where bank holidays are not honoured by an employer each bank holiday day is replaced by another day of paid holiday granted in lieu.'.

Eleanor Laing (Conservative, Epping Forest)

Clause 13, to which amendment No. 27 refers, makes Henry VIII clauses look positively weak, because it is so wide ranging. I know that several of my hon. Friends would refer to it as a Henry VIII clause, because it gives so much power to the Government to do almost anything that they want.

The Minister responsible for employment relations looks happy, and I do not blame him. It is the job of a Minister to do what he wants to do to the extent to which he can do it, and I am sure that he does it with the best of intentions. It is, at the same time, the job of the Opposition spokesman to ensure that we know what he is doing and that our constituents, to whom we are all accountable, know what he is doing.

Although I personally might trust the Ministers who are sitting in the Committee today to be absolutely honourable in all that they do in bringing in further powers by regulation, we do not know what may happen in the future. The Minister with responsibility for women and equality is so pleased at my comments that she is going away, and I do not blame her—that is fine.

Mark Prisk (Conservative, Hertford and Stortford)

Does the immediate absence of the Minister not show that we cannot be certain about even these Ministers?

Eleanor Laing (Conservative, Epping Forest)

I hope that we can, because these Ministers understand what we are doing. I say to my hon. Friend that we could have far worse Ministers. There could be much better Ministers, such as me and my hon. Friend. It is only a matter of time.

It is our job to hold Ministers to account. Clause 13 introduces so many different regulations, most of which ''may'' do something rather than ''will'' do something. Amendment No. 27, which relates to subsection (1), states:

''The Secretary of State may by regulations make provision conferring on workers the right, except in prescribed cases, to a prescribed amount of annual leave in each leave year'',

after which I would insert the words

''excluding United Kingdom public bank holidays''

before the words

''as defined for the purposes of the regulations.''

On Second Reading, the Secretary of State appeared to make it clear that

''the Government intended to introduce powers to ensure that the annual leave entitlement for employees did not include the UK's eight bank holidays.''—[Official Report, House of Commons, 5 December 2005; Vol. 440, c. 659.]

Alan Reid (Liberal Democrat, Argyll and Bute)

I do not believe that there is a UK bank holiday. There are England and Wales bank holidays, Scotland bank holidays and Northern Ireland bank holidays. I want to make the point to the hon. Lady that the Scottish Executive are responsible for Scotland's bank holidays.

Eleanor Laing (Conservative, Epping Forest)

The hon. Gentleman makes a very good point. He is absolutely correct. I was quoting from Hansard when I said the ''UK's eight bank holidays.'' He is more accurate, and I shall amend my remarks accordingly.

Clause 13 is complicated. It is about regulations that are here, there and everywhere. However, the House does not always have the power to vary holidays. The Scottish Parliament is looking at the possibility of introducing a St. Andrew's day holiday. Most of us support the plan to introduce such a wonderful celebration of our patron saint. My hon. Friends in the Scottish Parliament would argue that if St. Andrew's day is to become a public holiday, another public holiday should be removed. That is directly relevant to amendment No. 27, because clause 13 is so vague that we hardly know what we are debating. We hardly know on what we can hold the Government to account.

I want to make two points. The CBI is the voice of business in the United Kingdom, and rightly so. Bearing in mind what I said earlier, whatever laws the Houses of Parliament passes must be made to work in practice outside. As I have said again and again, I want this Bill to work. We must therefore get the balance right. It would be detrimental to employees, employers and business if we gave employees too many rights and too few to employers.

Gerry Sutcliffe (Labour, Bradford South)

I want to be clear about what the hon. Lady is saying. I understand the point that she makes about the lack of clarity in the clause. However, does she support the principle of people getting more holidays than the 20 days to which they are entitled at present?

Eleanor Laing (Conservative, Epping Forest)

That is precisely what I am probing. I am concerned that public holidays may be counted as employees' annual leave. They are public holidays, and, as such, they should be treated as separate. I am also concerned, however, about employees' entitlement suddenly increasing to four weeks' paid holiday. The Bill does not state that; presumably, that will emerge in regulations. It is quite difficult to probe on that matter because the Government have not set out their intentions.

Peter Bone (Conservative, Wellingborough)

Reading these regulations, I conclude that they are so vague that it appears that the Government have a right, under this clause, to prescribe the annual leave of every business in the country. They can say that Joe Bloggs must have four weeks' annual leave, not six or two. That is so vague and draconian that it must be revised.

Eleanor Laing (Conservative, Epping Forest)

It is vague and it might be draconian. My interpretation is not exactly the same as my hon. Friend's, but he makes a good point. We should not be wondering about the intention of this clause, and there should not be a different understanding between my hon. Friend and myself. Good legislation should be clear. This is not clear because important measures will emerge only in regulations.

The CBI is concerned that these proposals will have a detrimental impact on business if implementation is not handled in a sensitive manner. Employers generally want their staff to enjoy adequate paid holidays. We are trying to make all employers do what good employers have always done. Good employers get the best out of their staff by treating them well. If they are treated well, employees work better, resulting in more loyalty, job satisfaction and productivity. The CBI is not against the proposal, but it is likely that it would impose a substantial cost on some businesses, and the pace of its introduction will determine whether it has a severe impact on employers or whether that impact can be dealt with.

If the Government were to introduce, for example, an extra two days each year over the next four years, that may be a more reasonable and gradual way to phase in the entitlement. The Government would achieve their aim, employers would be able to cope with it better, and employees would benefit. Phasing in over time is essential if the legislation is to work without causing a sudden and unbearable impact on many small businesses. That brings us back to the balance between employer and employee.

Employers are not bad people. They generate wealth and create the jobs that are done by employees. If a small business is affected detrimentally and, therefore, closes, the employees lose their jobs too. No one would then benefit so it is important that, whatever the Government do on this matter, is done sensitively, gradually, carefully, and with consultation. I expect to see many weeks of statutory instruments as a result of clause 13 because it provides for so many regulations. The Minister has already explained the need for further consultation before the regulations are published. I hope that he will listen to employer-representative bodies and others so that the regulations that he will eventually introduce under clause 13 will be workable and will, therefore, benefit everyone.

Mark Prisk (Conservative, Hertford and Stortford)

On a point of order, Mr. Forth. I am sorry to interrupt the deliberation. The debate so far on the amendment has been reasonably broad and that is to be welcomed. Can you confirm that it is still your intention to have a stand part debate?

Eric Forth (Conservative, Bromley and Chislehurst)

At this stage I am perfectly prepared to have a stand part debate because the hon. Member for Epping Forest has restricted her comments quite properly to her amendment. Clause 13 ranges rather more widely than that.

Alan Reid (Liberal Democrat, Argyll and Bute)

I regret that I cannot support amendment No. 27, not least because it includes a phrase for which no definition exists. I understand that the Government are committed through their manifesto to introducing eight extra days of leave, which I presume is what the clause is all about. The clause leaves everything open to regulation. It is difficult to have a debate today because of the way that it has been framed. At least under subsection (6) it will be through the positive procedure and so we will have a chance to debate the matter when it comes to the statutory instrument.

Regarding the public holidays, the hon. Member for Epping Forest referred to a debate in the Scottish Parliament about declaring St. Andrew's day a public holiday. That debate threw up many interesting positions. There does not seem to be anywhere in the UK a statutory definition of a public holiday. A bank holiday is apparently only a day on which banks may close, not must close. Although I do not support the amendment, I want to urge the Government when they bring forward these regulations to put bank holidays and public holidays on a statutory footing, with the power to set those dates being devolved to the Scottish Parliament and the Northern Ireland Assembly when it is re-established.

Jim McGovern (Labour, Dundee West)

If I understood the hon. Member for Epping Forest correctly, she is trying to achieve the same ends.

Eleanor Laing (Conservative, Epping Forest)

Yes.

Jim McGovern (Labour, Dundee West)

Raised eyebrows were mentioned earlier. There have been more raised eyebrows than at a Roger Moore convention. The amendment is a gentle reminder to the Government about annual leave entitlement. The amendment adds a new condition to the regulations that are to be drawn up after the Bill is enacted. I should say straight away that I believe that annual leave is vital to the well-being of society in general. It reduces stress by increasing leisure time for people to spend together. It benefits families by allowing parents to spend quality time with their children. It also benefits business by allowing employees to remain fresh and therefore to work more efficiently. As far as I am aware the CBI also agrees, so it is really a question of how the legislation is introduced.

The Government had a manifesto commitment that all employees would be allowed 20 days' annual leave and that this should not include public holidays. I use the term ''public holidays'' advisedly. The hon. Member for Argyll and Bute and I are the only members of the Committee representing Scottish constituencies. I am sure that other Members will be aware that often on a bank holiday in Scotland the only people who are on holiday are bank employees. I realise that it is different in England. The manifesto commitment to 20 days' annual leave, plus public holidays, was great news for many employees, who felt short changed by the legislation as it had stood since it was introduced via the working time regulations in 1998.

It is great news for them and I welcome it. I welcome what the Government are trying to achieve here. But I have a concern. The hon. Member for North Norfolk is no longer here. He mentioned this morning that in a previous life he was an employment lawyer. I mean no disrespect to him, but since 1998 employment lawyers have been advising businesses that if they already offered their employees eight days public holidays in a year all they had to do was add another 12 days annual leave to that to comply with the legislation. That worries me.

Under the clause as it stands, without any additional guarantees, the self-same employment lawyers could advise the self-same businesses that all they had to do now was to work through public holidays and they would still give people only 20 days' annual leave if there was no legal right to public holidays separately from the 20 days. That would introduce an element of flexibility for those on the minimum annual leave entitlement, but it would make no difference to the number of days' leave offered to them. I realise that many employers give more than the legal minimum. Since the general election in May, I have found myself in the unusual position of being an employer and I certainly give more than the minimum legal requirement.

Charles Walker (Conservative, Broxbourne)

Is the hon. Gentleman suggesting that if people are required to work through a public holiday—for example, at Tesco—they should receive a day off in the week in lieu of having worked that holiday? If so, should that be made clear in an amendment to the working time regulations? I think that those regulations prescribe the 12 days plus eight to get to the 20.

Jim McGovern (Labour, Dundee West)

Yes, that is what the amendment says. There should be 20 days' annual leave plus the eight for statutory public holidays; they should be additional to the 20 days. As I said, I am an employer and I give more than the legal requirement, but we must legislate to support people who are employed by companies that only ever apply the minimums, and the amendment would enable us to do that. If businesses start working public holidays and that becomes the norm, public holidays as we know them could ultimately become a thing of the past for people employed by those companies.

I think that the hon. Member for Epping Forest said that the CBI regard the provision in the Bill as the introduction of a minimum of 28 days' annual leave. That is how I would like to understand it, but I think that there is a loophole that still allows the matter to be at the discretion of the employer. They may say that they require people to work public holidays. I would like a guarantee set in stone to say that all workers are entitled to a minimum of 20 days' annual leave plus eight days for statutory public holidays.

Charles Walker (Conservative, Broxbourne)

How would that work in the retail trade, for example, where firms now tend to work on Boxing day? On many public holidays, they require their people to work, because they are often the days when they sell the most goods to shoppers. How would the hon. Gentleman get around that?

Jim McGovern (Labour, Dundee West)

I thank the hon. Gentleman. I agree that public holidays could not always be taken by everyone on the dates for which they are set. I am thinking of the emergency services, hospitals and other caring services. However, the amendment says that if people have to work on such a date, they will receive a day in lieu at another time, mutually agreed between them and the employer. I would like assurances from the Minister, if that is possible, that we will at some stage apply the same minimum annual leave entitlements for all workers and that we will seek to protect public holidays. My amendment would be a way of doing that.

Gerry Sutcliffe (Labour, Bradford South)

I shall restrict my remarks to the amendment. As you said, Mr. Forth, we shall consider more detailed issues in the clause stand part debate. Bank holidays were set out in the Banking and Financial Dealings Act 1971, with obligations placed on banks as employers. The hon. Member for Argyll and Bute and my hon. Friend the Member for Dundee, West (Mr. McGovern) say that there are separate arrangements for bank holidays in Scotland, and I take the point that when we get to the regulations, that may be a time to consider these issues in more detail.

Hon. Members have said that these are probing amendments rather than something that they want in the Bill. Amendment No. 27 would give the Secretary of State power to make provision for annual leave except in relation to public and bank holidays. Although many people already benefit from time off in respect of bank holidays in addition to their statutory four weeks' leave, some do not. We want to tackle that unfairness, but we do not propose a statutory entitlement to take the bank holidays as leave. Inevitably, some people will work on a bank holiday, as my hon. Friend said, so we are talking about time equivalent to bank and public holidays.

As regards amendment No. 16, clause 13 already gives us the power to implement our manifesto commitment, but it would be inappropriate to go into that level of detail before we have carried out consultation with all stakeholders. It is more appropriate to put the detail in the regulations, which are subject to the affirmative resolution procedure.

Having considered the issue in great detail, I can say that we should not underestimate its complexity. We promised to gather more data as well as undertaking a full and extensive consultation and we should not prejudge the results of that work. I hope that the hon. Member for Epping Forest will withdraw her amendment. I shall go into greater detail on the Government's position in the clause stand part debate.

Eleanor Laing (Conservative, Epping Forest)

I understand the Minister's explanation. It was the usual explanation as to why the Bill is drafted as it is. However, it is important that we have had an opportunity to consider this aspect of the Bill. It covers an important point, and I am as surprised as the hon. Member for Dundee, West that he and I agree about the result that we want to achieve. However, I want to ensure that the result is balanced, and detrimental neither to business nor to employees. Having considered the matter in detail, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mark Prisk (Conservative, Hertford and Stortford)

I am grateful for the opportunity to consider the clause on stand part: the previous debate, which considered amendments Nos. 27 and 16, rightly highlighted, in the words of my hon. Friend the Member for Epping Forest, its extraordinary breadth and scope. It is very wide indeed.

Subsection (2) will allow the Secretary of State, in regulations, to make provision for determining the amount of annual leave and the pay in respect of that leave, for enabling a worker to elect when to take that leave and—I hope to clarify the meaning of subsection (2)(d)—for the payment of compensation in prescribed cases to a worker. They are broad powers.

On the point about our ability to scrutinise those powers, and the expectations of our constituents as to how effectively we have scrutinised them, our hands are tied. We can only speculate about the content of the regulations.

Will the Minister answer a couple of questions arising from the debate? How much annual leave do the Government have in mind? How many days do they intend to lay down in law? What assurance will he give that there will be no further changes during this Parliament? We have discussed the problems of constant change, and I hope he can provide some assurance on that.

Similarly, what will be the basis of the provision of any pay taken during leave taken? Will there be a minimum standard or, instead, a mandatory rule? That is a significant issue. What protection will an employer have over when leave is taken?

I refer the Committee to subsection (2)(c), which says that the regulations may in particular

''make provision enabling a worker to elect when to take leave to which he is entitled by virtue of the regulations''.

Having run my own business, I can foresee the danger of four or five people exercising their right under that provision and leaving a business with the difficulty of having the same people on leave in the same weeks. I suspect that you will have anticipated that as well, Mr. Forth. A particular member of staff may be an expert on a particular machine or part of the business, so there will be difficulties with individuals and with groups when they take their right to leave. I hope the Minister can clarify that point.

Subsection (2) (d) states that the regulations may

''make provision for the payment of compensation in prescribed cases to a worker who has not taken leave to which he is entitled''.

Will the Minister explain the types of case that the Government expect to prescribe? Will he clarify what the Government mean by ''the payment of compensation''? Are they talking about monetary value or other days in lieu? How will that work? The phrase ''payment of compensation'' suggests monetary compensation, but that may not be so. I hope he can clarify that, too. Those are our questions on the details.

May I raise a couple of other points? First, the clause seems to drift between employees and workers. As an expert in employment rights, the Minister knows that employees and workers are not the same in law. Will he define who is a worker and who the Government believe are employees? Are they the same thing?

That leads me to another important but similar point. Members of the Committee will have noted that subsection (2)(g) says that provisions made by regulation should happily fit in with ''any Community obligation''. I am not entirely comfortable with that phrase, not least because, as the Minister knows, the European Union Commission has an entirely different legal attitude to what is a worker from the Government. Will he say what it means in terms of compatibility with European Union legislation? I would be interested to hear how the two compare.

Next, on how the provisions will be brought into law, what opportunities will there be for consultation? There is consultation with Members of the House in the form of draft statutory instruments, with enough time being allowed for us to consider them. More important, if I may say so, is the consideration of such instruments by the small businesses themselves and their representatives. What process will be used for the potentially large number of statutory instruments that the provision allows? I would like that to be put on record. Further to that, when can we expect those statutory instruments to be laid? Are any imminent?

Lastly, I assume from subsection (6) that each and every instrument laid before the House will be considered under the affirmative resolution procedure. The Minister nods. I suspect that some Members may wish that to happen on the Floor of the House. I hope he can clarify that. He is indicating yes from a sedentary position—in the vernacular, a nod—but I hope he will confirm it.

Gerry Sutcliffe (Labour, Bradford South)

I am grateful to the hon. Gentleman for giving way, and I hope to be able to answer his questions. I ask him the question that I asked the hon. Member for Epping Forest: does the Conservative party support the additional entitlement to 20 days? I want to be clear about that.

The rest of the debate is in Hansard.