Work and Families

---

 
Column Number: 045
 

Standing Committee A

Tuesday 13 December 2005

The Committee consisted of the following Members:

Chairmen: †Mr. Eric Forth, Hugh Bayley

†Bone, Mr. Peter (Wellingborough) (Con)

†Brown, Lyn (West Ham) (Lab)

†Dhanda, Mr. Parmjit (Gloucester) (Lab)

†Johnson, Ms Diana R. (Kingston upon Hull, North) (Lab)

†Khan, Mr. Sadiq (Tooting) (Lab)

Kirkbride, Miss Julie (Bromsgrove) (Con)

†Laing, Mrs. Eleanor (Epping Forest) (Con)

Lamb, Norman (North Norfolk) (LD)

†McGovern, Mr. Jim (Dundee, West) (Lab)

†Morgan, Julie (Cardiff, North) (Lab)

†Munn, Meg (Parliamentary Under-Secretary of State for Trade and Industry)

†Prisk, Mr. Mark (Hertford and Stortford) (Con)

†Reid, Mr. Alan (Argyll and Bute) (LD)

†Stewart, Ian (Eccles) (Lab)

†Sutcliffe, Mr. Gerry (Parliamentary Under-Secretary of State for Trade and Industry)

†Ussher, Kitty (Burnley) (Lab)

†Walker, Mr. Charles (Broxbourne) (Con)

Emily Commander, Frank Cranmer, Committee Clerks

†attended the Committee

[Mr. Eric Forth in the Chair]

Work and Families

Clause 8

Entitlement to additional statutory

paternity pay: general

4 pm

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

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): 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.

Mr. Mark Prisk (Hertford and Stortford) (Con): 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.

Mr. Sutcliffe: 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
 
Column Number: 048
 
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

Mrs. Eleanor Laing (Epping Forest) (Con): 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'.

The Chairman: 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.'.

Mrs. Laing: 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
 
Column Number: 049
 
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?

Mr. Alan Reid (Argyll and Bute) (LD): 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
 
Column Number: 050
 
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.

---

Prepared 13 December 2005