Penalties: failure to comply
Mr. Hammond: I beg to move amendment No. 182, in page 24, line 23, after ''record'', insert
''which is or was at the time of the request in his possession or which he is required by this Act or any regulation made under it to keep.''.
The amendment, like the next one, seeks to deal with the way in which the penalties clause, clause 11, will operate in practice. Clause 11(1)(a) says that where a person
''fails to produce any document or record, provide any information or make any return, in accordance with regulations under section 8 . . . he shall be liable to the penalties mentioned in subsection (2) below''.
That is a wide-ranging power and does not, in my view, spell out sufficiently clearly that the requirement to produce documents on pain of a financial penalty will be limited to documents specified in regulations as ones that the person being addressed is required to keep.
In other words, as is the practice with taxation and payroll matters generally, if someone knows that they must keep their records for six years, seven years or whatever it is, they must be able to produce them and can expect to be penalised if they cannot do so. In the absence of a document being specifically defined as one that must be kept, it seems unreasonably onerous on our good friends small employerswhom I cite one more time before getting to the end of today's proceedingsto include the clause with unlimited scope.
Alan Johnson: Let me say at once that we do not expect the penalties to be imposed very often. However, as with statutory maternity pay and statutory sick pay, we need to have provisions available.
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Amendment No. 182 talks about the penalties that will apply when someone has failed to produce the documentation that clause 8 requires them to keep. The requirement will not be onerous. It is reasonable that Inland Revenue officers should be able to view those records during routine visits and confirm that payments have been made and recovered correctly. Similarly, they will need to examine records and call for information where it is necessary to intervene in a dispute and decide whether statutory paternity or adoption pay should be paid. We need a sanction to back up the requirements to keep and make available such records. It is necessary to defend the right of employees to receive what they are entitled to and it helps to defend the Exchequer from those rare situations in which someone attempts to obtain something to which they are not entitled.
Mr. Osborne: In view of the importance of the issues that the Minister is discussing and the fact that the Committee has not discussed any of the clauses relating to statutory maternity pay and statutory maternity leave, will the Minister provide more time for debate of these important issues and lift the guillotine that is about to fall?
Alan Johnson: The programme motion is a matter for you, Mr. Amess. It was agreed at the beginning of our proceedings. Labour Members are surprised at the amount of time that has been spent on some issues when we could have gone on to other matters.
Mr. Hammond: I am fascinated that the Minister has identified some issues in part 1 of the Bill that need to be debated. Will he tell the Committee which matters need further debate in Committee?
Alan Johnson: The hon. Member for Tatton set out the matters that he would have liked debated. I merely made the point that we spent some time discussing some other issues, but I am in danger of touching on sensitivities.
Mr. Tony Lloyd (Manchester, Central): Does my hon. Friend agree that the Committee has debated the issues, particularly amendment No. 182, in a reasonable spirit? The hon. Member for Runnymede and Weybridge has done that reasonably, but at considerable length. Alas, because of his filibuster, we shall be unable to discuss the issues surrounding statutory maternity pay.
Mr. Hammond: On a point of order, Mr. Amess, the hon. Gentleman accused me of filibustering. We did not do that even in the good old days before guillotines and we certainly cannot do so now. No Chairman on the Speaker's Panel would permit it.
The Chairman: I think that I have heard enough. We must return to the amendments.
Alan Johnson: Of course, Mr. Amess.
I have explained that the provision is for penalties in respect of specific records and we shall set them out in regulations under clause 8. The amendment would go much further and penalties could be applied for any
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documentation held by the employer or person or any that he was required to keep under the Social Security Contributions and Benefits Act 1992. Absolute clarity is required in all matters relating to people's obligations and the sanctions for failing to comply with them. People must know what they must do and what will happen if they fail.
The amendment could confuse people. I know that that is not what the hon. Gentleman intends, but I hope that he can see the unintended consequences and that he will withdraw it.
Mr. Hammond: That is certainly not the purpose of the amendment. Its purpose is to limit the scope of subsection (1)(a) to documents that are required by regulations to be kept and which are properly required by an officer of the Inland Revenue in accordance with regulations under clause 8. There is a point there, but in the hope of being able to reach the next amendment before the guillotine falls, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Hammond: I beg to move amendment No. 183, in page 24, line 35, at end insert
'(subject to subsection (3) below)'.
This is a probing amendment. Subsection (2)(b) provides for a continuing, daily-accruing penalty in the event of non-compliance with the requirement to produce documents. The clause also provides maximum penalties for different classes of offences. The purpose of the amendment is to probe the Minister on whether there should be a cap on the total cumulative penalty under subsection (2)(b). I have suggested that £3,000 would be more than adequate. When someone cannot produce a document, there is no point in continuing to charge a daily penalty.
Alan Johnson: We do not intend to provide a cap. The problem with the amendment is that someone who failed to provide evidence that they were required to produce for as little as 50 days could then be free from any penalty thereafter. It is not inconceivable that an employer, to get away from what he considers to be an onerous responsibility--
It being Seven o'clock, The Chairman proceeded, pursuant to Sessional Order D [28 June 2001] and the Order of the Committee [6 December2001], to put forthwith the Question already proposed from the Chair.
The Chairman then proceeded to put forthwith the Questions necessary to dispose of the business to be concluded at that time.
Clause 11 ordered to stand part of the Bill.
Clause 12 ordered to stand part of the Bill.
Schedule 1 agreed to.
Clauses 13 to 21 ordered to stand part of the Bill.
Adjourned accordingly at one minute past Seven o'clock till Thursday 17 January at half-past Nine o'clock.
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The following Members attended the Committee:
Amess, Mr. David (Chairman)
Hughes, Mr. Kevin
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Osborne, Mr. George
Williams, Mrs. Betty