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Mr. Hammond: Is the hon. Gentleman aware of the Carter review to which I referred earlier? Does he anticipate a gesture in response to that review, as proposed by the new clause? The state should recognise that in some cases significant costs previously borne by the state are transferred to business through business administration, particularly of in-work welfare schemes.
The hon. Gentleman also mentioned favourable treatment for parents when he discussed flexible working. I am delighted that there is favourable treatment for parents; I say so as someone who, sadly, is not a parent, despite my best endeavours and those of my partner. Although I am not a parent, the next generation will look after me in my old age, assuming that I have the privilege of reaching an old age. I hope that my nephews and nieces are prepared to look after me as carers, if it comes to that. I salute the hon. Gentleman for suggesting that carers should be included in flexible working. I only wish that he had tabled an amendment to that effect; we could have debated it and heard the Minister's views.
Finally, on new clause 4, I hope that the Minister will give us an assurance that sufficient resources will be available to the Advisory, Conciliation and Arbitration Service to do any extra work that may be required under the Bill. I am not saying that the Bill will require extra work, but if it does, I hope that the Minister can give us that assurance.
Mr. Mark Field: It is a pleasure to follow the hon. Members for Wolverhampton, South-West (Rob Marris) and for Weston-super-Mare (Brian Cotter). I suspect that the tent will not be big enough to keep us all happy, but I hope that our debate will continue in an easy-going manner.
I well understand what was said in relation to part 1. Although I did not serve on the Standing Committee, I have paid close attention to the Bill, which is clearly important. Behind it is a practical analysis of the modern world of work, and I fully appreciate that the family needs and responsibilities, especially of young employees, must be catered for. I should like to think, though, that many sensible and responsible employers have catered for them on a voluntary basis, without the need for legislative constraint. I recognise that the Minister will no doubt point out that some employers do not play the game and make life difficult for employees who find themselves in dire straits, for whatever reason.
My hon. Friend the Member for Runnymede and Weybridge hit the nail on the head. There is a great cost not just to businesses, but to fellow employees arising from many of the new rights that have been put in place. It is highly unfair, particularly in a tight employment
Helen Jones: Can the hon. Gentleman enlighten me? In new clause 1(c)(iii), who are the "others", who are neither employers nor employees? How would he carry out an assessment of the costs and benefits of the Bill to them?
Mr. Field: There are external costs that will not be borne directly by either employers or employees, but which may be borne by a range of bodies. For example, to promote the Act it is likely that there will be a large amount of advertising via various Government Departments, which have been known to extol the virtues of their own legislation. That expense would be covered by sub-paragraph (iii).
Mr. Hammond: The hon. Member for Warrington, North (Helen Jones) does not seem satisfied with my hon. Friend's answer. The most obvious "others", neither employees nor employers, are surely the Governmentthe public purse.
Earlier, the Minister proudly announced the support of the CBI. Central to the proposal set out in the new clause is the protection of small businesses. The CBI has supported in principle a number of pieces of legislation that have been introduced in the past five years. I hasten to add that the CBI was also supportive of much legislation passed over the previous 18 years. One of the reasons for that support is that larger businesses are well catered for. They have the infrastructure in place. They have large human resources or personnel departments.
That luxury is not available to many small and medium-sized enterprises. With 10 or 15 employees, they will often not have a dedicated HR department or a payroll department. That goes to the heart of the issue that my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) has made his ownthe Carter report and the incumbent expenses on the payroll that have been brought into play by recent legislation, rules and regulations. That is a great concern to many small businesses. If the Bill is enacted, there should be an early opportunity for a full assessment of the cost to small business resulting from the new rules and regulations.
My chief concern is that many of the proposals will provide a strong disincentive for smaller employers to increase their work force. That is especially true of small, vibrant organisations which, by the nature of their business, employ a lot of young employees. With 10 employees, say, all of whom are in their 20s or early 30s, there is a risk that two or three will be on paternity or maternity leave at any one time. The prospect of having to keep those jobs open for any length of time, especially when the economy may start to go through a more difficult phase, may result in such businesses deciding that they should not grow any larger. If rules and regulations provide a disincentive to businesses to employ more than, say, 12, 15 or 20 employees, those businesses may have to set up small subsidiaries that operated under a different umbrella in order to get round the rules. That would be an unhealthy state of affairs, but the provisions in the new clauses could alert us to this at an early stage.
In many of our constituencies, whether they be the heart of the City of London, which I represent, or some of those represented by Labour Members, the days of large-scale employers being able to offer many thousands of jobs are gone. The small and medium-sized enterprise sector is the real vehicle for employment growth in the years ahead.
Mr. George Osborne: It is welcome to have a chance to debate the important new clauses moved by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond). They go to the heart of the Bill as regards the costs and benefits that it will impose on our society and our economy.
As hon. Members who served on the Committee will know, many parts of the Bill are uncontroversial. Widespread support was given to the extension of maternity rights, the creation of new paternity rights and, especially, the creation of new rights for adoptive parents. Conservative Members found themselves in the refreshing position of arguing for more rights for adoptive parents, which is a good sign. However, the Government must accept that those rights are not introduced without costs to society and to business. Indeed, the Government's regulatory impact assessment makes it clear that substantial costs are involved. Maternity leave will cost taxpayers £305 million and paternity leave and paternity pay will cost employers £64 million and taxpayers £63 million.
New clause 3 gives us the opportunity to debate where those costs should fall. Should they fall on employers, on employees or on society as a whole? If we as a society want stronger families and believe that it is right for parents to take time off to help to bring up their children, it is important that we give them a chance to do so. We should provide financial support, if necessary, or the chance to take a career break before returning to work. It is welcome that in recent years hon. Members of all parties have come to accept that.
Other parts of the Bill received less general support in Committee. Hon. Members have mentioned union learning representatives and the requirement on employers to give them paid leave. The Government predict a massive increase in the number of union learning representatives, from 3,000 at present to 22,387 in eight years' timeI am not sure how they managed to be so precise in predicting that figure. Many of those will be in the public sector. An illuminating fact that was mentioned in Committee was that the Department for Education and Skills has no union learning representatives.
The cost of the union learning representatives clauses will be considerable. The cost to employers of the clauses on fixed-term work could amount to £136 million. The Government estimate in the regulatory impact assessment that the huge new rightthe duty to consider flexible workingwill cost employers £286 million, possibly more. As I think that the Minister would freely admit, we are not sure whether that figure is remotely accurate, because the provision opens up a whole new area.