---

Work and Families Bill

I beg to move, That the clause be read a Second time. Although we strongly support the purposes of the Bill as a package, we must recognise its impact on employers, especially small employers. It is incumbent on us all to ensure that its impact on employers is kept to a minimum. That has clearly been the Government’s view, which they have expressed at various times. The Government’s 10-year strategy for child care, published at the same time as the pre-Budget report in 2004, made a commitment to consider the case for what the Revenue document, with which the Government have provided us, described as ““direct payment””—a term I shall use in making the case for the new clause. Their starting point suggests that they saw the possible benefits of direct payment. Indeed, Labour’s manifesto repeated the commitment to help employers. It made a commitment to increase paid maternity leave"““while simplifying the system for employers””." That commitment has been constantly stated. The paper from Her Majesty’s Revenue and Customs, which the Government have helpfully supplied, refers to the consultation that took place in the run-up to publication of the Bill. It talks about meetings with a consultation panel to discuss the issue; the panel included payroll experts and representatives from small and large employers. Interestingly, the Government’s paper confirms that the employer representatives on that panel, in essence, support the new clause. They recognised that concern was greatest among small employers and that large employers did not want to introduce direct payment, as it would cause them unnecessary complexity and they would prefer to administer the system themselves. They recognised that there would be benefits for some small employers. The paper and common sense suggest that the benefits would be felt most by employers who still use manual payroll systems, where the process for making payments is more time-consuming than in an automated system. The paper confirms that if a system were introduced based on the provisions of the new clause, or something akin to them, the cost of its introduction would be reduced. It gives a figure for start-up costs of £38 million—rather than £75 million—for a simple system, directed to assist small employers who choose to transfer responsibility to the Government. The paper accepts that the ongoing yearly costs would inevitably be substantially less than the £50 million it cites.