Employment Bill

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Mr. Hammond: I can understand how those watching our proceedings might find it curious that such joy can be elicited by the acceptance of an amendment dealing with the simple deletion of a single word. However, had they thought up, written down and tabled some 180 to 190 amendments and had not a single one prove acceptable to the Government, they would perhaps understand a little better. On this

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occasion, my joy has been compounded by the intervention of the hon. Member for Wolverhampton, South-West. Apart from anything else, he has given me an idea for an amendment that I could table on Report. That would enable the Minister to repeat his trick—assuming that the hon. Gentleman does not table one first.

Amendment No. 166 must be taken together with amendment No. 167, which would delete new section 171ZS(8). Subsection (8) states:

    ''In such cases as may be prescribed, a person's normal weekly earnings shall be calculated in accordance with regulations.''

Subsection (6) states that

    ''a person's normal weekly earnings shall, subject to subsection (8) below, be taken to be the average weekly earnings which in the relevant period have been paid to him or paid for his benefit''.

We therefore return to a debate that we had this morning: ''normal weekly earnings'' means ''average weekly earnings'', except in such cases as may be prescribed. In the cases that may be prescribed,

    ''earnings shall be calculated in accordance with regulations.''

It is all clear. Normal earnings are average earnings unless the Secretary of State says by regulations says that they are something else, as yet unspecified.

5.30 pm

That situation seems to me not entirely satisfactory, but no doubt the Minister has some explanation and can give us an example of a problem that he will need to address by making regulations that deal with particular cases in which ''normal weekly earnings'' cannot be ''average weekly earnings''. I take it that we are not talking here simply about the bonus example that we had this morning. [Interruption.] Perhaps we are talking simply about that, in which case we shall find out soon.

I shall now discuss amendment No. 168. Subsection (7) provides a definition for the purposes just of subsection (6) of ''earnings'' and ''relevant period''. Why does there need to be a different definition of those terms for subsection (6)? What is the distinction between subsection (6) and the rest of this part of the Act, in terms of the appropriate definition of ''earnings'' and ''relevant period''?

Alan Johnson: Amendments Nos. 166, 167 and 168 would remove provisions allowing us to specify in regulations how average weekly earnings are to be calculated. They would be unworkable, leaving it unclear to employers and employees how to determine whether an adopted parent had met the earnings conditions to qualify for statutory adoption pay and how much statutory adoption pay a parent was entitled to receive. Removing the subsections would open up numerous possibilities for misinterpretation of the way in which a person's normal weekly earnings and average weekly earnings should be calculated. The debate that we had this morning on amendment No. 127 and the amendments grouped with it is relevant here.

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Mr. Hammond: The amendments do not leave out subsection (6), but merely delete the reference in subsection (6) to its being subject to subsection (8). They seek to leave out subsection (8) and the reference in subsection (6) to subsection (8).

Alan Johnson: Subsection (8) covers the situation in which a person is not paid weekly. Subsection (6) provides for calculation of weekly earnings. We need subsection (8) as well to deal with people who are paid monthly or over another period.

I have a long explanation of the way in which the calculation works, but as the hon. Gentleman is on a roll I do not want to punish him by going through all that. It is quite a complex calculation, but one on which we consulted widely. As I said previously, we proposed to change it and it was employers who said to leave it as it was.

As in so many other cases, the subsections reflect the approach taken for statutory maternity pay. Primary legislation for SMP similarly allows for calculation of a person's normal and average weekly earnings to be set out in regulations. I believe that that enables us to provide the detail of how such earnings are to be calculated that employers and employees need to avoid uncertainty. We shall make use of the regulation-making powers provided for in this part to explain in detail how weekly earnings should be calculated for the purpose of statutory adoption pay.

Mr. Prisk: If removing subsection (7) would cause greater confusion, could it not be that subsection (7), by giving the Minister future powers to change the definitions, could itself be the root cause of the confusion?

Alan Johnson: I do not think so. We have stuck rigidly to the tried and tested measures that we have used for statutory maternity pay. We have ensured that statutory adoption pay—and paternity pay—mirrors those procedures. It is a system to which employers are used and on which they have received advice and guidance over a long period. The amendments would be unworkable and would do a disservice to employers and employees. I hope that, with that clarification, the hon. Gentleman will seek to withdraw the amendment.

Mr. Hammond: I am grateful to the Minister for his explanation. In light of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Mr. George Osborne (Tatton): I am happy to speak on the amended clause—indeed, happy to speak on a clause that we have successfully amended. This is the first time in this Committee that we have done so. I congratulate my hon. Friend the Member for Runnymede and Weybridge on spotting the mistake and getting the amendment accepted.

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I cannot resist also congratulating the hon. Member for Wolverhampton, South-West. Earlier in the Committee he supported us when he was not supposed to and then he managed to oppose us when he was not supposed to do that either, but he, like me, is a new boy here, and we are learning as we go along.

As the briefing documents provided for the Bill show, there are 2,700 domestic adoptions each year. Although that is a small number in the overall scheme of things, it is incredibly important to the children concerned, to the families concerned—many of whom would otherwise be childless—and to society as a whole that society is seen to care for those children who cannot be cared for by their natural families.

I very much welcome the Government's stated intention of increasing the number of adoptions. I read that their target is to increase the number by a third. They say that by 2003 there may be as many as 3,850 adoptions. In all sincerity I wish them every success in achieving that target and hope that they exceed it. I believe that statutory paid adoption leave will help. I freely admit that it is not something that the Conservatives, or previous Labour Governments, did. One could argue that Governments of all persuasions have not done enough to make adoption easier for parents. Therefore, I very much welcome the provision.

Mr. Prisk: I share my hon. Friend's support for the principle, but does he in turn share my concern that in the debate on the clause there seemed to be a lack of consistency on the Government side? My hon. Friend the Member for Runnymede and Weybridge argued that the Government had failed to be consistent. They have argued for consistency all the way through in maternity, paternity and adoption, and yet that has not been applied in the clause.

Mr. Osborne: My hon. Friend makes a good point and anticipates my remarks. The crucial period for an adoptive family is the initial weeks when a child is placed with the family. It is arguable that it is even more important that time is given for an adoptive family, because the children are often not newborn, but may be one, two or three years old, or even older. They have to adjust to the new family that they find themselves in and the adoptive parents have to adjust to the new child that has arrived in their life, often much more grown up than would be the case in a natural family.

I therefore share the concern expressed by my hon. Friends the Members for Runnymede and Weybridge and for Hertford and Stortford that statutory adoption pay will be set at only £100 a week for the majority of those who will claim it. This is a good opportunity to bring this new and welcome scheme of paid adoption leave into line with maternity leave. I cannot believe that there would be enormous costs to the Exchequer if people were allowed, for the first six weeks or so, to—

Mr. Hammond: My hon. Friend might do the Committee a service if he were specifically to ask the Minister whether his Department has made an estimate of that cost.

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Mr. Osborne: I am happy to do so. I understand that the current estimate of the cost is £10 million to the Exchequer for the year 2003-04. I should be interested to know, if the Minister wishes to intervene, what the additional cost to the Exchequer would be if paid adoption leave were brought into line with paid maternity leave.

Mr. Kevin Hughes (Doncaster, North): I should be grateful if the hon. Gentleman would enlighten the Committee. He is arguing for more money to be paid but the shadow Chancellor is on the record as saying that he would reduce Government spending. How does the hon. Gentleman's argument fit with the policy of the shadow Chancellor and the Tory party to cut public expenditure?

Mr. Osborne: I am grateful for that helpful intervention. Sadly, at this early stage of my parliamentary career I am not yet in the position of drafting shadow Budgets. However, I want to make two points. First, my right hon. and learned Friend the shadow Chancellor has decided, in light of recent experience, to put improvements in public services ahead of tax cuts. Secondly, under a Conservative Government the economy would grow much faster and there would be more tax receipts. There would certainly be enough to meet what would, I believe, be the small cost of bringing paid adoption leave into line with paid maternity leave.

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