funding of employers' liabilities
Mr. Hammond: I beg to move amendment No. 172, in page 22, line 4, at end add
'(c) include provision for a person who has made a payment of statutory paternity pay or statutory adoption pay qualifying for small employers' relief to be entitled to recover such further sum in respect of his administrative expenses as the regulations shall provide'.
I had nothing to say on clause 6 because, I am disappointed to say, my substantive amendment to itmy commawas not called.
The matter to which amendment No. 172 refers is one that we have dealt with already. Perhaps the timetabling was such that it could not be grouped with earlier amendments for a single debate. Given that we are under such pressure of time, it would probably be inappropriate to delay our proceedings by asking members of the Committee to consider an issue that we have already discussed. Therefore, I shall not press the amendment.
The Chairman: We now come to amendment No. 173.
Mr. Hammond: I beg to move amendment No. 173, in page 22, line 11, leave out 'may' and insert 'shall'.
The Chairman: With this it will be convenient to discuss the following amendments: No. 174, in page 22, line 29, leave out subsection (6).
No. 175, in clause 8, page 22, line 38, leave out
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'Regulations under subsection (1) may'
'if regulations are made under subsection (1), they shall.'.
No. 176, in page 23, line 6, leave out subsection (3).
No. 181, in clause 10, page 24, line 19, leave out subsection (3).
Mr. Hammond: It is amendment No. 175 that I intend to address substantively. Amendments Nos. 173 and 176 cover territory that we have debated and it would not be appropriate to go round that loop again. The same applies to amendment No. 181.
Amendment No. 175 is slightly different and would amend clause 8(2). Clause 8(1) provides that the
''Secretary of State may make regulations with respect to the payment . . . of statutory paternity pay and statutory adoption pay.''
Clause 8(2) states:
''Regulations under subsection (1) may, in particular, include provision''.
I have always thought that those subsections were strange. Having said that the Secretary of State has power to make regulations, what is the point in then saying that those regulations ''may, in particular'' include provision but in no way limit the discretion of the Secretary of State to do what paragraphs (a) to (d) provide? The purpose is not clear, unless it is to signal an intention to do something. It seems that if the Secretary of State makes regulations under subsection (1)
''with respect to the payment by employers of statutory paternity pay'',
employers will have an absolute requirement to know what records they are required to keep. We shall discuss situations in which people fail to produce records that they are supposed to keep.
If regulations are made under clause 8(1), I suggest that the question is not that the Secretary of State or the regulations may include provision for records to be kept, but that they must include provision for records to be kept. The amendment suggests that clause 8(2) should state that if regulations are made under subsection (1) they shall ''in particular, include provision'' and so on. It would then be clear that if subsection (1) is used, subsection (2) will provide detailed requirements in regulations about the records that are to be kept. Everyone would then know exactly where they stand.
Alan Johnson: We have returned to our old friends ''may'' and ''shall''. I recall that during our proceedings last Tuesday evening, the hon. Gentleman's view was that the use of those two words came about because of their normal use in different sorts of legislation. He may be right, but I am happy to return to the fray.
The hon. Gentleman did not refer much to the other amendments, but it is important that I touch upon them. I shall deal first with amendment No. 173. Clause 7 covers the way in which statutory paternity pay and statutory adoption pay will be recovered by employers. We have made it clear from the start that employers will be able to recover a proportion of the statutory payments that they make, following the
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precedent of statutory maternity pay. The provision for recovery is in the Bill and the detail will be in regulations.
We see no circumstances in which we would withdraw the employer's right to recover so the first part of the clause provides that the Secretary of State ''shall'' make those regulations--that point was made by the hon. Member for Hertford and Stortford this morning--and those regulations ''shall'' deal with the amount that an employer may recover. As I said, the amount in percentage terms is fixed in the Bill, as it is for statutory maternity pay.
Amendment No. 173 asks for a commitment to regulations under clause 7(4) and there is no difference here. The subsection sets out matters that will be covered in regulations, but it does not set out everything that may be in regulations. It tells us that regulations ''may, in particular'' provide for funding in advance to come from moneys that the employer is due to pay to the Inland Revenue and it will recover any amount overpaid. If the hon. Member for Runnymede and Weybridge is looking for a commitment to do that, I can give him one. The regulations made under subsection (4) will do a couple of important things
Mr. Hammond: I was not going to have this debate because we have heard it before. However, as the Minister has chosen to have it, will he tell usto avoid doubtwhether he would be in less of a position to regulate on matters if subsection (4) did not exist? My contention is that he would not, so the subsection is superfluous. It serves no purpose to have a subsection that uses the phrase ''may, in particular''. It is already clear from subsection (1) that regulations may do all of those things and more.
Alan Johnson: I believe that the subsection is necessary. The hon. Gentleman seems to want to change the words ''may, in particular'' to ''shall, in particular''. However, it is the words ''in particular'' that are particularly important because we may want to do other things as well. It is important to give employers the comfort that they will have the ability to recover the money that they pay out to the Inland Revenue. Most important, the subsection provides for a right for employers to be able to ask for a payment in advance from the Inland Revenue. That is new and a way of helping employers in a Bill that takes the opportunity to tidy up anomalies.
Mr. Prisk: The Minister has taken the issue further from the point that I wanted to raise. He cites the need for flexibility in the clause, which I understand to a degree, but does he agree that, as the Government have had to change their position with other payroll costs, circumstances could mean that changed regulations might allow the Government to reflect administrative costs for small employers?
Alan Johnson: Last Thursday, the hon. Gentleman expressed concern about whether we would be able to change the figure of 92 per cent. It is included in the
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Bill, so could be changed only by primary legislation. It would be difficult for us to provide additional assistance and we would not be keen to do so, for the reasons that I have stated.
Turning to clause 8 and amendment No. 175, the hon. Member for Runnymede and Weybridge is obviously worried about the use of the word ''may''. Before he made his contribution, I believed that that was his only point, but it now seems wider. The issue of ''may'' versus ''shall'' is relevant and the hon. Gentleman may suspect that the regulations will become optional, but that is not so. We do not intend that to happen because the clause addresses administrative arrangements and it is right that the power to make regulations should be broadly permissive. Administrative arrangements may need to change as the scheme develops, either because they have become too complex or they do not do their intended job. We do not think that they will have to be changed, but they may have to be so the amendment is unnecessary.
Finally, reference is made in the Bill to the Inland Revenue and I will not go through the arguments again. Such concurrence with the Inland Revenue exists in other legislation such as that for social securityI checked that over lunch. For all my earlier arguments, I hope that the hon. Gentleman will withdraw the amendment.
Mr. Hammond: I was not going to pursue the ''shall''/''may'' debate, which is why I did not speak to amendment No. 173. However, as the Minister has chosen to go down that road, I will follow part of the way. As long as the subsection says ''may'', it serves no purpose in enabling or empowering the Secretary of State. It is a piece of spin. It makes a statement about the Government's intentions. The Government want everybody to know that they may make provision for funding in advance as well as in arrears, to take the example of subsection (4). Subsection (1) says:
''The Secretary of State shall by regulations make provision for the payment by employers of statutory paternity pay and statutory adoption pay to be funded by the Board to such extent as the regulations may specify.''
That encompasses all the things that subsection (4) more particularly sets out. If there is a purpose in setting out three of the infinite number of matters that the regulations under subsection (1) might dictate, it must be to differentiate them from any other group of regulations that the Secretary of State might make.
One possible such distinction would be that the Secretary of State undertakes definitely to do certain things. A clause that said that regulations under subsection (1) ''shall'' do X, Y and Z would have some meaning; it would be relevant. It would say that the Secretary of State would exercise his broad, permissive power in the following specific ways. However, by using ''may'', the subsection adds nothing to the powers that it confers or the constraints that it imposes on the Secretary of State. It simply allows the Government to make a general statement about their thinking.
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