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Employment Bill

February 12, 2002

Employment Bill

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 want to address in particular new clause 1, to which my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) gave such a skilful introduction.

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

market and in a small business context, that people who by choice are not parents, for example, find an increasing burden placed on their shoulders.

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 Government – the public purse.

Mr. Field: I hoped that that was the point that I was making. I thank my hon. Friend.

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 own – the 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.