Work and Families Bill - Leave and pay related to birth or adoption
Eleanor Laing supports the intention of the Bill to improve the work-life balance for parents and carers, but raises some concerns over the budrens it will create for small businesses in particular.
Mrs. Eleanor Laing (Epping Forest) (Con): We want the Bill to work, which is why we have joined the Liberal Democrats in tabling new clause 1. The hon. Member for North Norfolk (Norman Lamb) explained eloquently and thoroughly the reasoning behind it, and we also discussed the matter at some length in Committee. He has cited all the statistics and arithmetical reasons that explain why we think that the Bill would be considerably improved with the addition of new clause 1 and I will not repeat his arguments—I agreed with what he said.
We understand that if the Bill is to work, its measures must have the confidence of those who will be affected by it. I am especially worried, as ever, about burdens on small businesses. Again and again, the Government bring forward ideas. Those ideas are sometimes good in principle, as is the case with the Bill. The Bill's intention of improving the work-life balance not only for parents—both mothers and fathers—but for people with caring responsibilities is good, but as ever, the Government will not take responsibility for administering their proposals. They expect, and indeed require, others to do so, and in this case, as in so many other cases, those others will be small businesses.
Mr. Mark Prisk (Hertford and Stortford) (Con): I hate to interrupt my hon. Friend's flow, but does she realise that the people to whom she just referred are also parents? The irony of the Government's position is that self-employed parents might be able to spend less time with their families because of the administrative burden that we are debating.
Mrs. Laing: My hon. Friend is correct. It is undoubtedly true that when we talk about helping parents and carers, and thus improving matters for children, we are talking about all families in the country. Some families consist of employees, while others consist of employers. No one is suggesting that they should be treated differently. We want to improve matters for all families, so my hon. Friend makes a pertinent point.
As ever, the matter comes down to a question of balance. New clause 1 would help small businesses considerably by taking away from them the burden of administering maternity and paternity leave and pay. It would thus be easier for small businesses to concentrate on the matter on which they should concentrate: in a nutshell, making money. Time is money for a small business person. If employers have to spend more time than is necessary on administrative matters, they are, by definition, spending less time on running the business and making a profit. If a business makes a profit, it allows more jobs to be created and, perhaps, the payment of bonuses to employees. It is in everyone's interest that businesses run efficiently and well. The days of employers taking everything out of a business and employees putting in all the effort are gone—well, we hope that it does not happen any more, at least in 99 per cent. of cases. Most good employers know that if they treat their employees well, they will have a better work force and thus better businesses.
We return to the question of balance. Most people in Britain today are employed not by large businesses and multinationals, but by small businesses. What happens to small businesses thus has a knock-on effect on most employees. If employers spend too much time on administration, their businesses suffer and become less profitable, which might mean that they have to make employees redundant, or not take on more employees. A successful business will create employment and provide better conditions for employees, and a business is more likely to be successful if the administrative burden is removed from it.
Mr. Stewart Jackson (Peterborough) (Con): Does my hon. Friend agree that there seems to be a dichotomy in the Government's position? They are unwilling to accept new clause 1, but on Second Reading, at column 645 of Hansard on 5 December 2005, the Secretary of State for Trade and Industry said that the Government estimated that the new provisions would affect only a small number of small businesses. One thus wonders why they are not willing to accept the reasonable measure that we are considering.
Mrs. Laing: I agree. My hon. Friend makes a very good point. I was about to mention the cost question, the Minister will not be surprised to hear.
In Standing Committee A, on 13 December, at column 53 of Hansard, when we were debating an amendment about the central administration of benefits and statutory pay, the Minister gave us some remarkable figures. He said that the cost to small businesses would be in the region of £400,000 a year. That is quite low, and if that were to be the cost, it would be reasonable. Yet the cost to Government, the Minister told us, of doing exactly the same would be £75 million in start-up costs and £15 million annually. I do not suggest for a moment that the Minister gave those figures in anything other than good faith, but I am amazed, and have been since 13 December. Where do those figures come from? The difference between £400,000 and £15 million is enormous, and it beggars belief that the figures can be accurate.
I do not believe that £400,000 would be the effective annual cost to small businesses throughout Britain. It must be much, much higher. When we pass the Bill, as I hope we do, we shall be asking businesses to take on an even greater task than they have at present, and give more and more flexibility to their employees. I agree with that in principle. It is right that maternity arrangements and pay should be as advantageous as possible because, as a society and an economy, we need women to do two jobs. We need them to produce children and we need them to be economically active in the work force.
Norman Lamb: The hon. Lady referred to the figure of £400,000 as the cost for small businesses and made the point that it may well be much higher. Is not the issue also the rather unquantifiable time that it takes someone who is trying to cope with everything to deal with this burden on top?
Mrs. Laing: Yes, and that is exactly the point that I am about to make. We are asking businesses to give extra flexibility to their employees. That means that we are asking them to make administrative arrangements for people to be away from their work duties. We support that; it is right. Families need that time; children, particularly new babies, need that time. I know personally that it is vital, as I seem to be running around in circles. This is my son's first week at real school, and I am trying to take him there in the morning and pick him up in the afternoon, although I will not be there this afternoon. We are fortunate. We have great flexibility in our hours here—they are long hours but they are quite flexible. If we have that privilege, so should as many other employees in the country as possible. I am completely in favour of that.
We are, however, asking an employer, first, to make arrangements to provide that flexibility, and secondly to administer a replacement employee, perhaps from an agency, to do the work that is not being done by the person on leave. We are asking the employer to pay money to the employee, and to go through a further administrative form-filling experience of claiming it back from the Government and then balancing the accounts. The hon. Member for North Norfolk made the cash-flow point very well. Instead of a very simple arrangement between employer and employee for the payment of wages, tax and national insurance, the situation becomes much more complicated, and it all takes time. As I said before, to an employer or small business man, time is money. The very effectiveness of the businesses that we are trying to encourage and support is threatened by what we are asking them to do in the Bill.
In new clause 1, we recognise that we are asking businesses to take on extra burdens because that is right for the economy, society and families, good for employers and businesses, and good for employees, so the Government ought to help in the administration of that burden. The Government promised to be deregulatory—that is the biggest joke I have ever heard. The Chancellor makes speeches about deregulation; the Government count the regulations and say how many there should be. My understanding—the Minister will correct me if I am wrong—is that if a new regulation is introduced, some other regulation has to be abolished to keep the regulatory burden balanced. That is certainly not happening. The Chancellor likes to talk about these things, but in reality that is not what the Government are doing for the employers and employees in UK businesses.
Michael Jabez Foster (Hastings and Rye) (Lab): It is enormously difficult to decide what regulation to get rid of when another is introduced. The hon. Lady has said what a good idea these regulations are. Can she give an example of a regulation that she would get rid of, to help us out?
Mrs. Laing: Yes—exactly what new clause 1 proposes. The entire content of my speech is the answer to the hon. Gentleman's question. I propose that as we require an extra burden to be put on businesses by the regulations on maternity and paternity leave being introduced by the Bill, we should at the same time remove from small businesses the burden of administering those regulations.
Mr. Sutcliffe: I read with interest the Financial Times this morning, which says, "Tories back concerns over parental leave". The hon. Lady was quoted as saying that she was concerned about fathers taking days off. Is she saying that, contrary to what her party said on Second Reading and in Committee, it does not accept the culture change and principles underlying the Bill because the Government are not prepared to consider one aspect of the issue—direct payments?
Mrs. Laing: Not at all—far from it. I did not think that I was wrongly quoted in the Financial Times; I thought that it was a well-balanced explanation of the situation, although I admit that I have not yet read it, so I will have to check it very soon. I am utterly consistent with everything that my hon. Friends and I said in Committee. We entirely back the principle of the Bill. The hon. Member for Hastings and Rye (Michael Jabez Foster) asked me a pertinent question: if a regulation is to be brought in, which one would we take out? As I said, all this is a question of balance. We are asking small businesses to take on extra burdens, and it is the Government's responsibility to help them with those burdens. It is simply not fair to expect small businesses to do the Government's work of collecting taxes and paying out benefits. That is what the civil service is for.
Michael Jabez Foster: Is the hon. Lady simply talking about who should pay for the regulations, rather than whether the regulations should be introduced? I thought that she was arguing that certain regulations were unnecessary. However, she now seems to be arguing about who should pay. What substantive regulations would she get rid of?
Mrs. Laing: It is not just a question of who pays; it is a question of who administers the regulations. The hon. Gentleman has misunderstood my point. Theoretically, the provisions in the Bill should not cost small businesses anything, because they will be reimbursed for the statutory maternity and paternity pay that they pay out. They could choose to pay additional maternity and paternity pay, but that would depend on the business, and on the contract between a particular employer and employee. The issue is one of who does the administration involved.
The Government continually fail to recognise this problem. We are the party of small business, and we do recognise it. I can still hear my father complaining, as he sat up late into the night—often past midnight—year after year, filling in forms and administering the part of his business that he was required to administer by the Government. This was at its worst under the Labour Government of the 1970s, when there was a recession in the building industry. I will never forget the effect that that had on my father and the rest of our family, or the enormous strain caused by the Government's imposing great difficulties on small businesses. It is not difficult to run a business, but it is difficult to keep all the regulations straight and do everything that the Government require. That is mostly what makes businesses go out of business, and I do not want to see that happening.
The intentions of the Bill are good, and I can confirm, in answer to the Minister's question, that whatever the Financial Times says, we back the intent of the Bill. We are in favour of the really good provisions that it contains, because they will help families, employees and employers alike. However, we want the new regulations to work properly, and it is simply unfair to impose extra burdens on small businesses. They are the lifeblood of our economy and our society, and they must be helped, protected and nurtured, not burdened by extra red tape, regulations and costs.