Schedule 1 — Leave and pay related to birth or adoption: further amendments

Orders of the Day — Work and Families Bill – in the House of Commons at 3:30 pm on 18th January 2006.

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Photo of Meg Munn Meg Munn Parliamentary Under-Secretary (Trade and Industry) (Women and Equality) 3:30 pm, 18th January 2006

I beg to move amendment No. 1, in page 20, line 9, at end insert—

"1A In section 106 of ERA 1996 (replacements) in subsection (2)(a) after "adoption leave" insert "or leave under section 80AA or 80BB (additional paternity leave)".'.

This amendment will support employers in managing the new entitlement to additional paternity leave. The Government recognise that employers are concerned about their position when they take on a new employee to cover a woman's absence on maternity leave. Those concerns were raised on Second Reading. They were also discussed in Committee during debate on an amendment tabled by Norman Lamb. We recognise that the same issues will be of concern to employers taking on new staff to cover an absence due to additional paternity leave.

An employee with 52 weeks' service is, of course, protected from being unfairly dismissed. It is right that employees are protected in that way; the Government reduced the qualifying service from two years to one in 1999. However, we recognise that it is also right that we make the management of maternity, adoption and additional paternity leave as straightforward as we can for employers, and that includes making the management of employees they take on to cover maternity, adoption or additional paternity leave as straightforward as we can.

Section 106 of the Employment Rights Act 1996 provides that where an employee is taken on to cover an absence caused by pregnancy, childbirth or adoption leave and is dismissed because the original employee returns from the absence, they will be treated as having been dismissed for a substantial reason which would mean that the dismissal was not unfair, provided that the employer had acted reasonably.

Section 106 is intended to protect employers who take on employees to cover maternity or adoption leave. It enables them to dismiss the replacement employee when the original employee returns from leave. The replacement employee is also protected since section 106 applies only where the replacement was informed in writing when they were appointed that their employment would be terminated when the original employee returned to work, and the dismissal will be fair only if the employer acted reasonably and fairly and followed proper procedures in carrying out the dismissal.

As well as maternity and adoption leave, section 106 includes replacements taken on to cover maternity or medical suspensions and other absence caused by pregnancy.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Will there be a requirement for notice or any form of redundancy payment to be given to an individual being dismissed when a women returns from maternity leave? What period of notice and conditions will be attached to that dismissal?

Photo of Meg Munn Meg Munn Parliamentary Under-Secretary (Trade and Industry) (Women and Equality)

The hon. Gentleman will be aware that the Bill extends the notice that women returning from maternity leave give to their employer, enabling the employer to give more notice to the replacement employee. My understanding is that there will not be issues of redundancy as this is not a redundancy situation.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

A woman returning to work could say, "I'll be coming back in two or three months". Will there be a requirement for the employer to notify the temporary employee that they will be moving on? It would be fair for the temporary employee to have as much notice as possible that they will not required in future.

Photo of Meg Munn Meg Munn Parliamentary Under-Secretary (Trade and Industry) (Women and Equality)

My understanding is that nothing in the Bill changes the current arrangements, and clearly the employer has to follow the correct procedures. Having the extended notice helps the replacement employee. They need to be told at the outset that they are a replacement and that they will finish at that point. The proper procedures should be followed. I hope that that reassures the hon. Gentleman.

The amendment will allow section 106 to be extended to include the dismissal of employees taken on to cover absence due to additional paternity leave. In the majority of cases, such an absence will be short and the replacement employee will not have enough continuous service with their employer to enable them to claim unfair dismissal. However, there may be circumstances, including where additional paternity leave is taken on the death of the mother, where the father's absence is long enough to allow the replacement to clock up one year's service and be able to claim unfair dismissal. The extension of section 106 will provide certainty to employers managing the new entitlement to additional paternity leave. Employers will know that they can take on a replacement to cover the absence without concern about their ability to end the replacement employee's contract. I commend the amendment to the House.

Photo of Norman Lamb Norman Lamb Shadow Secretary of State (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

If my amendment on a related point has triggered the Government to spot this anomaly, I am obviously delighted. This measure appears eminently sensible, and we must ensure that in all the different circumstances—maternity or paternity leave, or adoption—the employer and the employee are in the same position. The amendment will regularise that situation, so as to ensure that in the few cases in which someone takes extended paternity leave beyond a year, they will not be in a different position from anyone else. We support the amendment.

Photo of Henry Bellingham Henry Bellingham Opposition Whip (Commons)

I was not on the Committee for this Bill, and I would like to ask the Minister and her colleagues a quick question. The proposal in the amendment seems so obvious and logical in the context of the Bill, and I wonder why it was not in the original Bill. Why was it necessary for the Government to table this amendment? I applaud them for so doing, but I wonder whether there is a good reason why the proposal was not considered in the first place.

Photo of Meg Munn Meg Munn Parliamentary Under-Secretary (Trade and Industry) (Women and Equality)

First, I am delighted that Norman Lamb is delighted. Secondly, to respond to Mr. Bellingham, the amendment will ensure that the regulations are clear and that everyone fully understands the position. As I said in my speech, the expectation is that, given the arrangements, there will be very few occasions on which additional paternity leave will last longer than a year. However, as hon. Members know, we are a listening Government and we respond to people's concerns. We wanted to do everything that we could to make the position clear, and that is why we have tabled the amendment at this stage.

Amendment agreed to.

Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified.]

Photo of Alan Johnson Alan Johnson Secretary of State for Trade and Industry 3:36 pm, 18th January 2006

I beg to move, That the Bill be now read the Third time.

This Bill, which has enjoyed a positive reception from both sides of the House during its passage, is pro-family and pro-business. These aims are not mutually exclusive, but mutually supportive. Flexible working increases the number of people who are able to work, which widens the talent pool for business. More importantly, it gives parents a genuine choice when making the difficult decisions about how they balance their work and family lives. That is why these measures are an essential component of an enabling state.

The Bill extends paid maternity and adoption leave. It extends to carers of adults the right to request flexible working. It also gives fathers the opportunity to play more of a role in their child's upbringing, and it makes it easier for employers to administer these rights. These are progressive policies that respond to profound changes in our workplaces and our homes.

It is therefore curious to read that the Leader of Her Majesty's official Opposition, Mr. Cameron, is apparently against the measures. Having pronounced his commitment to social justice and espoused the causes of trusting people and sharing responsibility, he now sides with some of the more reactionary elements of society in arguing to prevent fathers from exercising a choice with their partners to take a more prominent role in caring for their child.

I know that the right hon. Member for Witney, together with his hon. Friends on the Conservative Benches, voted against every single family-friendly measure that this Government have introduced, from extending maternity leave, maternity pay and paternity leave to the right to request flexible working. They also voted against giving adoptive parents help for the very first time in dealing with the difficult task of taking children into their homes. We genuinely hoped that there had been a change of heart, and that there would be a progressive consensus behind the Bill.

Photo of Henry Bellingham Henry Bellingham Opposition Whip (Commons)

The Minister will remember that, for a couple of years during the last Parliament, I shadowed him when he was a Minister of State. We consistently supported a number of family-friendly measures. We certainly gave our wholehearted support on adoption rights. Perhaps, going back a bit further, the Opposition might have taken a more anti-family stance, but for the past four years or so we have supported the Government on many occasions. Yes, we have had our differences with them over employment legislation, but we have also supported them time and again.

Photo of Alan Johnson Alan Johnson Secretary of State for Trade and Industry

I remember when we dealt with the Employment Bill in 2001. The hon. Gentleman's memory is faulty. Conservative Members opposed the Employment Bill on Second Reading on 27 November 2001. That Bill contained every element that I just mentioned. It was supported with fine words in Committee. I well remember the principle being acceptable, but when it came to the crunch and the vote, Opposition Members, including the right hon. Member for Witney, voted against every single measure. Although we hoped that there had been a change of heart and that there would be a progressive consensus behind the present Bill, that seems not to be the case, but I still hope that Members in all parts of the House will support the Bill this evening.

Progressive politicians should certainly back the Bill, because progressive businesses back it—not just the biggest businesses, which find it easier to invest in human resources policies, but small businesses too. In many cases, small businesses are far ahead of larger businesses in their enlightened approach to employment relations. They do it almost instinctively, as we found when we researched the original employment relations policies introduced in the early part of the century.

The economics are clear. It costs £80 to handle a straightforward flexible working request, for instance, but it costs £4,800 to recruit a new employee. That is why 90 per cent. of flexible working requests are being accommodated, according to a CBI survey. That is why Miles Templeman, director general of the Institute of Directors, which was against the original proposals back in 2000–01, now says:

"Our members, by and large, support family-friendly policies."

The CBI accepts in principle the Government's desire to extend family-friendly rights further.

Business backs the extension of flexible working to one group at a time, the very approach that we have taken in the Bill. Business also supports the extension of maternity pay towards 12 months by the end of this Parliament, and many of the other measures in the Bill—the increased notice periods, the "keeping in touch" days and the alignment of start dates, all of which are essential simplifications of the legislation. Many of these measures were developed in partnership with business, through our external advisory group of human resources experts.

We will continue to work closely with business as we move forward. In February, we will consult on the details of the paternity scheme so that large and small businesses can introduce these important measures successfully. We will also consult on the annual leave entitlement before putting detailed changes to Parliament, including on phasing in the introduction.

The Bill is business-friendly, child-friendly and parent-friendly and will enhance Britain's economic success. I commend it to the House.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality) 3:42 pm, 18th January 2006

May I begin by correcting what the Secretary of State has just said about the attitude of my right hon. Friend Mr. Cameron ? My right hon. Friend supports the Bill, as do I. If he did not support its provisions, I would now be urging the House to vote against the Bill on Third Reading. I am not doing so. I am supporting the Bill, as I have done throughout its passage which, incidentally, began before my right hon. Friend became leader of the Conservative party—a whole day before.

The right hon. Gentleman may be right in his recollection and assessment of what the Conservative party may have said in the dim and distant past. I am interested in the future.

Photo of Alan Johnson Alan Johnson Secretary of State for Trade and Industry

Will the hon. Lady confirm that in the dim and distant past—1 January 2006Mr. Cameron said:

"The suggestion for the massive extension of paternity leave owes . . . more to political correctness than the realities of life."?

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

It depends how one interprets those words. [Laughter.] My interpretation is that my right hon. Friend agrees with all that I have said during the passage of this Bill and, I hope, with all that I am about to say on Third Reading.

As I said on Report, it is idealistic to suggest that a work force will be happy, and able to do their jobs to the very best of their ability, if they do not have to worry about what is going on in the rest of their lives while they are at work. If, however, a person goes to work knowing that they can leave work if someone for whom they are caring at home—a small child, someone who is ill or an elderly relative—needs them, then they will work better and form part of a better work force.

Employers will be happier with how their employees are functioning, if their employees can get on with their work without anxiety about trying to balance work and family life—that said, mothers and fathers who go to work will always have some anxiety about their children or elderly relatives, so perhaps I am being idealistic. However, I am trying to convince the Secretary of State that I entirely agree with his remarks about the importance of flexibility and the work-life balance, which make for a better, more efficient work force.

If the Bill works as intended, it will be good for not only society, but the economy—the economic imperative.

Photo of Jim McGovern Jim McGovern Labour, Dundee West

In Committee, some hon. Members were surprised that the hon. Lady and I seemed to agree about annual leave entitlements. Will she confirm that she agrees that all workers should be entitled to 28 days paid annual leave guaranteed by law?

Photo of John Heppell John Heppell Government Whip

What does 28 days mean?

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

That is the point. Does it mean 28 days including public holidays or 28 days excluding public holidays? I personally think it correct to exclude public holidays from the 28 days. Public holidays should not be included as part of annual leave—they are additional holidays. The transition should be introduced gradually, because it will have a large and immediate impact on some businesses, which may be detrimental.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

I understand that the current provision is 20 days, of which eight days are bank holidays and 12 days are holidays provided by employers. The Warwick agreement states that employers will provide 20 statutory days with eight additional bank holidays on top of that, and the Minister provided an assurance on that point in Committee.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

I thank my hon. Friend for assisting me, because I have got it wrong. When I said 28 days excluding bank holidays, I meant to say 20 days excluding bank holidays. I inadvertently misled the House in my answer to Mr. Heppell, who said from a sedentary position that it depends on what 28 days means. I am in favour of 20 days plus bank holidays, not 20 days including bank holidays. I hope that I have now made myself clear. I apologise for my lack of clarity, Madam Deputy Speaker, and thank my hon. Friend Mr. Walker for noticing it and helping me so propitiously.

The Secretary of State is right that, if the Bill works as it is intended to work, business will become more efficient as well as more family-friendly. There is no need for what we describe as family-friendly measures to be in any way opposed to business-friendly measures. As he said, if things work properly, there should not be a choice between a business working efficiently and profitably and a work force being happy. On the contrary, for a business to work to the best of its ability, it is necessary to have a work force who are working to the best of their ability. That means that it is necessary to have a proper work-life balance. We come back, as we always do, to that word, "balance". That is what it is all about.

My concern throughout has been that, if measures go too far in one direction, the Bill will backfire. I do not want employers to be reluctant to employ women of childbearing age because they are likely to take maternity leave.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

The right hon. Gentleman rightly says that it is illegal. We recently spent a great deal of time on the Equality Bill making sure that it is illegal. I supported that Bill as well. Nevertheless, it was once the case that women were required to give up work, notably in the civil service. It happened to my mother when she got married. I do not think that she minded. It was the fashion at the time that if a woman who was a qualified civil servant got married, she was required to give up work there and then because it was assumed that she would have a baby more or less immediately. Of course, my mother was very fortunate because she gave up the civil service and had me, although I would not necessarily expect the whole House to agree with that. [Interruption.] If Mr. Khan would like to disagree, I will certainly give way to him. [Interruption.] The hon. Gentleman did not say anything—I turned the tables for a change by putting words into his mouth instead of him putting them into mine.

Photo of Keith Vaz Keith Vaz Labour, Leicester East

It was I who spoke from a sedentary position. I said that we are delighted by the decision taken by the hon. Lady's mother to have her immediately.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

I thank the hon. Gentleman. It was not quite immediately—if it had been, I would be even older than I am now, but we will not go into that.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. To save any further confusion, perhaps we could concentrate on the Third Reading of the Bill.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

Thank you, Madam Deputy Speaker. I will of course adhere to your ruling.

I do not wish to digress or to take up the House's time unnecessarily, but to convince the Secretary of State that I agree with most of what he said. We are thoroughly behind the Bill and its intentions, but I remain concerned about the burdens on small businesses and about the cost to the taxpayer and the business community, large and small, of implementing some of the regulations. I also remain concerned that, if employers do not have confidence in the Bill and feel that they are being forced into a situation that they do not want, the measure might backfire. However, I hope that it does not because in our debates in many forums in the past few months, we have all been trying to achieve equality in society and in the work force. That is not only desirable but necessary.

Women have to do two jobs and it is not only desirable but economically necessary that they should do that because we need them in the work force. We need women who are currently in the work force to remain there and it is wrong that a woman who has a child and wants to return to work should sometimes be required to go back at a lower level than that that she had reached before she gave birth. That is wrong socially and because it is unfair, but it is also wrong because of its effect on the economy.

I shall repeat the statistic that the Minister for women and equality first mentioned. If all the women in our work force worked at the height of their capability instead of doing jobs for which they are over-qualified in order to do part-time work to look after their families, annual GDP would increase by 3 per cent., which is equal to our annual trade with Germany. I have often used that statistic and people have argued against me on many occasions. I cite the Minister as the person who first mentioned it and I therefore hope for my sake as well as hers that it is accurate. However, I should like us to prove its accuracy by enabling the women to whom we refer to work to the limit of their abilities instead of being undervalued because they happen to be mothers as well as important people in the work force.

If we require women to do two jobs, we must also require families to support the women and the children involved. For that reason, it is necessary for fathers as well as mothers to have rights.

If a family is to work the way that it should, flexibility is required to enable people to look after their elderly parents, their sick relatives and their small children when necessary. Flexibility does not mean not working properly. If the employer and the employee exercise it responsibly, it works in everybody's best interests. That is why the Bill is so important. I am pleased to be able to support the Bill. It is a big step forward towards a family friendly workplace. If it works properly—I sincerely hope that it will—it will be a huge boost not only to our society but to our economy.

As Norman Lamb said, it is a pity that we have not seen the regulations. On Second Reading, the Secretary of State and the Under-Secretary, Mr. Sutcliffe, promised us that we would see them. There was an understanding that we would have them in Committee. The Minister expressed a further hope in Committee that we would have them before Third Reading. We are nearing the conclusion of proceedings on the Bill and we have still not seen the regulations, so I fear that it may be the duty of our colleagues in another place to pursue the argument about their introduction. In Committee, the Under-Secretary said that the Secretary of State was a "hard taskmaster" in promising that the regulations would be published soon. That was several weeks ago, and we still have not seen the regulations, which is disappointing. Our consideration of the Bill would have been better informed if the regulations had been published. I cannot make that point strongly enough.

Photo of Peter Bone Peter Bone Conservative, Wellingborough

In Committee, I thought that the publication of the regulations was more of a promise that an aspiration. It is difficult to consider the Bill properly without knowing what the regulations are.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

My hon. Friend is correct. It is difficult to consider the Bill properly without knowing what the regulations are. It is hard to understand why we have reached this stage without the regulations that the Secretary of State promised. The Under-Secretary said that he was doing all that he could to produce them. There is no urgency to introduce the Bill. We could have waited for Third Reading until next week, the week after, or the week after that. It is a good Bill, and we want it to come into force, but there is no reason why it should do so in six or seven weeks' time rather than in 10 or 11 weeks' time. We could have had a far better and more informed debate if we had had the regulations before us. As a matter of principle, it is careless of the Government to expect the House of Commons to do its job properly if we do not have all the information that they ought to give us to allow us to scrutinise the Bill properly.

Photo of Alan Johnson Alan Johnson Secretary of State for Trade and Industry

On Second Reading, I expressed the desire and hope that the regulations would be ready while the Bill was proceeding through the House. I am very sorry that that has not proved possible, but that is far from suggesting that it is an essential part of the legislative process. Countless Bills go through the House without regulations being published until they have completed their passage. That is the normal practice. In this case, particularly given concerns about the way in which paternity leave would operate, I thought that it would assist the scrutiny of the Bill in Committee if the regulations were ready while the Bill was proceeding through the House.

I accept, however, that the important thing is to get the regulations right. We should not hurry them unnecessarily and perhaps make errors. They are, of course, subject to the affirmative procedure. Our latest information is that they will be included in a consultation document in February. I am sorry that that is after the Bill will have completed its passage through the House but, because of the affirmative resolution procedure, it leaves ample opportunity for Members on both sides of the House to comment and amend them. However, may I record my apology that we could not do something which we hoped and tried to do?

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

I thank the right hon. Gentleman for his frankness and for his apology. The Minister said in Committee that the right hon. Gentleman is a hard taskmaster, and I am sure that some people are quaking in their boots and will not dare to ask for any flexible working time until those regulations appear. We look forward eventually to seeing the regulations and I am pleased to accept his assurance that all the regulations will be subject to the affirmative procedure so that we will have an opportunity in the Statutory Instrument Committee to consider them in detail. I look forward to being able to do so as soon as possible.

I want the Bill to work. I am concerned that some parts will not work if the regulations are too tight, if the burdens on small businesses are too great or if the red tape involved in administering the Bill's good intentions cause the legislation, once it comes into force, not to work as the Government intend. The Government have good intentions, and we have good intentions in supporting the Bill, but I do not want anything to happen that would undermine the position of small businesses, because that would make the whole body of legislation on maternity and paternity pay and family-friendly working arrangements backfire. We therefore want to examine the regulations in great detail to make sure that the Bill will work as intended.

I leave my reservations on the record and reserve the right to discuss the matter again. It is important that employers and employees alike have confidence in the way in which the regulations will work. If we all want them to work, it is important that we have further discussions about exactly how they will work and that we get the correct balance between the rights of business, particularly small business, and the rights of employees.

Having said all that, I conclude by thanking all the Ministers who have been involved in the passage of this legislation for the courteous and reasonable way in which they have dealt with it. In finalising the Bill, they have taken many concessions and points into consideration. I also thank Liberal Democrat and Scottish Nationalist Members who have contributed so much to the Bill. An unbelievable degree of consensus has been found between all the parties—particularly between the Opposition parties, which worries me considerably—which has meant that our deliberations have been pleasant and constructive throughout the passage of the Bill.I also thank my hon. Friends who served on the Committee and who supported the Bill today, and all the officials who have worked hard behind the scenes.

Strangely enough, we appear to be doing well in our use of time this afternoon. As the Bill is intended to be family-friendly, it is wonderful that our deliberation might finish early. I was upset at the thought that I would not be able to attend the first parents meeting at my four-and-a-half-year-old son's school, where he started only last Thursday. I was called before the headmistress this morning to apologise, as I was not going to be able to attend. If it turns out that we finish early—

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

As the right hon. Gentleman says rightly from a sedentary position, there is a right to request. I request that the House finishes its deliberation of the Bill before 6 pm, and then I can present myself to the headmistress.

Photo of Julie Morgan Julie Morgan Labour, Cardiff North 4:08 pm, 18th January 2006

I will be brief, in order to allow Mrs. Laing to attend the parents evening at her son's school. I am pleased to speak on Third Reading, and I congratulate the Government on yet another step forward to a family-friendly, more equal society, in tune with modern life. Along with all the other progressive legislation that we have introduced or are in the process of introducing—such as the Equality Bill and the Childcare Bill—this Bill will move us towards a more equal society. It is very important, and I was glad to serve on the Committee.

As has been said, much of the detail of the Bill has been left to regulation, and I accept my right hon. Friend the Secretary of State's comments that that must be done carefully and that time is needed, but that there will be the opportunity for further discussion if necessary. I particularly support the extension of the right to request flexible working to adults. As a carer myself, I spoke on Second Reading about the specific needs of carers, and I am anxious that the consultation on the regulations should give detailed consideration to the definition of a carer. It should be as wide and as flexible as possible. We have all received very good briefings from Carers UK telling us that caring is not the same as child care. Different needs are involved, and different factors must be taken into account. When the regulations are considered, it should be borne in mind that some of those who are cared for may suffer from deteriorating conditions. I am glad that we may have an opportunity to comment on the regulations, and I hope that the consultation will be as broad as possible.

At present, the right to request flexible working extends only to children under six unless the children are disabled. The Government do not plan to raise that age. As a Government, we have made tremendous progress towards considering the needs of parents, families and people with disabled and elderly relatives in an entirely new way. I hope that we have taken a step towards enabling all families with children of all ages to request flexible working. We all know that children's needs may be even greater when they are older than when they are babies or toddlers. Parents may be more likely to know where there children are when they are little. Different needs arise at different stages of the family cycle. I hope that the Bill will lead to circumstances in which everyone can combine work and family life to the benefit of all, and I hope that we shall be able to discuss that possibility in the future.

Businesses that already employ people who are carers have found it profitable to consider their rights and needs. I have encountered general support for the Bill among businesses, but I accept that we must consider their needs as well, and work with them to ensure that the fairer, more equal society for which we are working takes those needs into account.

I strongly support the Bill. It contains excellent provisions. I should like some of them to go further, but the Bill is nevertheless a tremendous step forward.

Photo of Norman Lamb Norman Lamb Shadow Secretary of State (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry) 4:12 pm, 18th January 2006

I join Mrs. Laing in thanking the Secretary of State and the two Ministers—despite their failure to provide the regulations on time—for the way in which they have conducted our debates here and in Committee. I also thank the hon. Member for Epping Forest and other members of the Committee, including Mr. Khan. I have not been on the receiving end of too many of his lashings. The Committee stage was conducted in good heart.

I am pleased to confirm to the Secretary of State that the Liberal Democrats are fully signed up to the progressive consensus that he mentioned earlier. I am delighted that on this occasion the Government are part of that progressive consensus: that is not always the case nowadays.

The Bill contains important measures relating to increases in maternity leave and pay, paternity leave and adoption leave. It is remarkable how long it has taken us to acknowledge the importance of giving parents time with children whom they adopt. The Bill also extends flexible working, and facilitates the provision of extra paid leave. It is a good package that recognises the changing nature of the workplace. There has been a transformation—a revolution—in the workplace over the past two decades, since the days when it was dominated by males—indeed, fathers. Women were denied many rights, and did not have the opportunity to become economically active.

The Bill also accepts the economic case for enabling people to stay at work, and to balance that with family commitments. For both those reasons, the Bill is very good. It makes the point that there is no conflict between profitability and family-friendly policies. From the very start of its existence, a company in my constituency adopted a culture of facilitating the employment of people with family responsibilities.

Photo of Norman Lamb Norman Lamb Shadow Secretary of State (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

No; I could not possibly comment on that company's commitment. For example, from the very start, this company—Listawood—enabled women to have time off during school holidays and to change their shifts during holiday times to tie in with their partners, and parents to take time out of work to see their children participate in sports days. Such initiatives are not rocket science, but they encourage employees to believe that they are valued and make them feel warm about their employer. I suspect that, as a result, they are more committed to the business.

The hon. Member for Epping Forest spoke of the days when women were sacked when they got pregnant. I was reminded of a role that I had in my previous existence as an employment lawyer.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

A very honourable profession.

Photo of Norman Lamb Norman Lamb Shadow Secretary of State (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

Absolutely. I led the campaign for compensation for women who were discharged from the armed forces when they got pregnant. Some 5,000 women were discharged simply because they became pregnant, and we should note the craziness of the resulting lost investment in their training. One of the biggest critics of the campaign to get compensation was a Conservative MP, so if the Conservative party has now moved on that is a good thing from everybody's point of view.

I have a number of specific points to make about the Bill, but I shall be as brief as I can because I want to make sure that the historic opportunity for parish councils to have their moment in the spotlight in the forthcoming Adjournment debate is not lost. Never has so much time been able to be devoted to the interests of parish councils. First, we must all accept that the Bill does impose new burdens on employers. By and large, employers' organisations recognise that the rights being introduced or extended are good things in themselves and they are prepared to go along with them, but they continue to express concern about the impact on small businesses in particular.

On Report—the Secretary of State was not present for that debate—the Government rejected a new clause to introduce a right for small employers to transfer responsibility for the payment of statutory maternity and paternity pay to the Government. We put it to the Minister present for that debate that the Government ought to consider adjusting the percentage payback to employers when recompensing them for the maternity or paternity pay paid out. Currently, 92 per cent. is paid back to all employers who make national insurance contributions in excess of £45,000 a year; for those below that level, the figure is 104.5 per cent. However, even for smaller employers, such repayments do not reflect the administrative burden. In an intervention on my speech on the new clause, the Minister seemed to accept the case for compensating for the cost of the administrative burden. Given that the Government rejected the new clause, they ought to consider making an adjustment to assist employers. If they are unable to help them through the direct payment method, that is another way in which they could help, and they ought to take it seriously.

My second point concerns the regulations facilitating the increase in paid leave. The Bill provides potentially sweeping powers for the Secretary of State to increase paid leave. The understanding is that it will be increased by another eight days, to reflect the fact that there are still many employees who do not get paid for bank holidays and other public holidays. We very much support such an extension. The CBI made the case for phasing in that additional right.

Photo of Norman Lamb Norman Lamb Shadow Secretary of State (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

I see that the Minister is nodding at that. My purpose is merely to ensure that the Government consult fully with business interests on this matter. I am sure that they will, as the effect will be felt most particularly in low-paid employment such as the hospitality and cleaning industries. The additional costs will be considerable, and there is at least a case for phasing the changes in. The Government need to consult carefully about that.

Secondly, I turn to the regulations covering the circumstances in which maternity leave can be replaced by paternity leave—when the father can take time off after the mother returns to work. I support that provision, but framing the regulations to ensure that it works effectively could be a complex matter. In most cases, for instance, the father and mother will work for different employers, with the result that their employers will have to exchange information with each other. It will be difficult to make sure that that works effectively—both for fathers and mothers and for employers, especially small ones—and again I urge the Government to consult very carefully on that. They should also look at the mechanism again after a year or some other interval to ensure that it is working effectively.

My third point has to do with the extension of the right to request flexible working. I support that, but on Second Reading I mentioned the contention of the Parkinson's Disease Society that a right to make such a request only once a year did not take into account the fact that the seriousness of some conditions, including Parkinson's disease, can vary considerably over the course of 12 months.

The Government did not accept the idea that requests might be made more often, and I understand why. However, I urge Ministers to reflect on concerns raised by organisations such as the Parkinson's Disease Society and to see whether the system could be made more flexible. Alternatively, I hope that the guidance that they supply will at least encourage employers to go beyond the statutory minimum in respect of helping the carers of adults with a horrible illness such as Parkinson's disease.

Julie Morgan made a very important point about how carers are defined. That definition will determine whether the extension of the right to request flexible working is limited in value. If the definition is narrow, few people will benefit, whereas a broad definition will be of real value to a large number of carers. Like the hon. Lady, I hope that a broad definition is adopted, so that many people who care for loved ones at home can benefit.

My final point has to do with the extension of the right to request flexible working to include people with teenage children. The Equal Opportunities Commission has said that the right should, in due course, be extended to cover everyone. People at work who do not have children or who do not care for loved ones at home could feel that there are two separate groups in society. Single people who crave a better work-life balance could believe that they have no right to request anything.

Photo of Norman Lamb Norman Lamb Shadow Secretary of State (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

And from Conservative Members—I am sorry to have left them out.

I understand why the provision to allow people to request flexible working is being phased in. The Government's step-by-step approach is sensible, but I hope that they will be prepared to consider extending the right to everyone. This is a light-touch regime: people will have the right only to request flexibility, not to get it, but they will be able to discuss the matter with their employer. Indeed, anyone who falls outside the Bill still has the right to ask their employer, but there is no statutory framework to facilitate that. I hope that the Government will say that as time goes by and the arrangements are assessed and evaluated, they will be able to go on to ensure that everyone has the same right of request.

The debate has been well conducted at every stage, and there has been broad consensus about sensible provisions. I confirm that we shall support the Bill.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting 4:25 pm, 18th January 2006

It is a real pleasure to speak on Third Reading to a united Chamber. There was, in fact, a broadly united Standing Committee, too. Some on the Opposition Benches would, given the new leadership of the Conservative party, like to forget the recent past, and particularly their voting record. The Bill needs to be considered in the context of a journey that began in 1997. Although Norman Lamb was right to say that most good employment practices are not rocket science, the reality is that for those employers who do not get there by themselves, we need prescription in the law. Secondly, the law and regulations help to change attitudes so that employers, parents and carers change over time.

It gives me great pleasure to welcome the main thrust of the Work and Families Bill, which will extend paid maternity and adoption leave. It will also extend the right to request flexible working to carers of adults. It will help fathers to play a role in their child's upbringing if the mother returns to work. It will also make things easier for employers—a point often forgotten in Report stage debates. It will make it easier for employers to manage the administration of rights. The Bill will also include powers to deliver and ensure that all workers are entitled to four weeks of statutory leave in addition to the eight days for bank holidays.

It is a great pleasure to welcome the Bill, but it is worth emphasising that it is part of a jigsaw. Other parts of that are the work we have done on tax credits and child tax credits—helping hard-working families and those who are least well off. Other parts of the jigsaw are the work we have done to extend maternity leave to 26 weeks, not just benefiting mothers and families, but benefiting employers by facilitating more continuity and less staff turnover, with mothers given longer maternity leave.

We introduced two weeks' paternity leave. Other pieces of the family-friendly jigsaw are the introduction of three months' adoption leave. We must not forget the right to request flexible working, which has benefited 1 million parents across the country and many hundreds in Tooting. We also, of course, in another piece of the jigsaw, increased maternity pay, which was as low as £55 in 1997. Part-time workers now have the same rights as full-time workers, particularly benefiting women and ethnic minority employees, who were disproportionately part-time workers. Other pieces of the jigsaw are the introduction of four weeks of paid leave, which will include the eight pubic holidays. Finally, another piece of the jigsaw is the introduction of the national minimum wage—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I hope that the hon. Gentleman will now begin to address his remarks to the present Bill.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

I will, indeed, and I am grateful,

I was coming to the point that the Bill, as part of that jigsaw, is different from other pieces of legislation in at least one respect: it has the support of Her Majesty's official Opposition. I do not mean to be churlish in acknowledging that U-turn, which is welcome.

I must emphasise what the Bill does to improve the quality of life for families in Tooting and around the country. Increased notice periods benefit both employers and employees, clarifying in law the fact that reasonable contact during maternity leave is permitted, allowing optional "keep in touch" days and enabling women to go to work for a few days during the paternity pay period. That will help employers to run maternity leave more effectively and will improve communication and contact during leave periods. The Bill will also enable statutory maternity pay to be paid daily and start on any day, which will ease the administration of SMP and allow employers to align the payment of SMP with their normal payroll arrangements.

Some of my hon. Friends and Liberal Democrat Members have mentioned the extension of the right to request flexible working to carers. It is important to reassure business that the costs of that will not be disproportionate. The majority of the cost of the measures in the Bill will fall to Government, because the Treasury will reimburse business for any maternity and paternity pay, at the rate of 92 per cent. for large businesses and 104 per cent. for smaller businesses. It is often forgotten that the net cost to business is estimated to be much smaller—£40 million to £90 million in any one year—and much of it is offset by the benefits that accrue, such as lower recruitment costs because more mothers return to work. As has been mentioned, more flexible working practices also lead to more productivity and profit, estimated at 3 per cent. of GDP.

The fact that groups as disparate as the Federation of Small Businesses, the TUC, the British Chambers of Commerce, the Maternity Alliance, Carers UK and even, dare I say, the Conservative party welcome the Bill is to be commended. The fact that the Bill will pass unopposed shows how far society has moved in recent years. As a Labour Member, I am especially proud that the movement towards a more family-friendly society and a healthier balance between work and family life began in earnest in May 1997.

Photo of Charles Walker Charles Walker Conservative, Broxbourne 4:32 pm, 18th January 2006

It is a privilege and honour to follow Mr. Khan because I had the great pleasure of being a councillor with him in Wandsworth. I congratulate him on his excellent speech. Parental leave is a good thing, and that is accepted on both sides of the Chamber. Most important, it is good for children. Children need their mum and dad. They do not need to be farmed out to day care centres at two or three months old. That is not good for them and it is not good for families. I am delighted that the Bill will allow children in their formative years to spend more time with their parents. After all, once they hit eight, nine or 10, the last thing that they want to do is spend any time with us.

The Bill is also very good for parents. It allows mothers and fathers to share child-rearing responsibilities between them. It is also excellent that women who go on maternity leave can return to the job that they left. Let us imagine the outrage if the Secretary of State for Health, for example, left to have a baby and was offered a junior transport job when she returned. She would be appalled, we would be appalled and the nation would be appalled. The important element is choice. It might be that the Secretary of State decided that she wanted to spend more time with her family and have a better work-life balance, so she wanted to become a junior Transport Minister. It would be in a strange, parallel universe, but it might happen. In any event, it must be her choice whether to return to her health portfolio or take a slightly less senior role. Choice is very important.

The Bill is also good for business, because it will be able to hold on to talent. Business is in a skills battle at present. There is a skills shortage and good people are leaving the labour market and not returning. Most good employers will welcome the Bill. Indeed, many good employers have already adopted many of the provisions, but other employers—with a little encouragement—may find that it is a good thing for them and allows them to become more profitable in the longer term.

I want to inject a couple of caveats about the benefits for business. I am broadly in favour of increasing paid holiday entitlement from 20 to 28 days. It was always a little disingenuous of us to include eight days of bank holidays in the 20-day period. That was an unsustainable position, but the Minister assured us that he would look at the impact of the increased entitlement on small businesses, for whom the extra eight days would mean a 3 per cent. increase in their payroll costs. Given that there are other added costs, it is important that we consider the impact on overall employment rates, profitability and performance.

The Bill is exceptionally good for the economy. There is a skills shortage; we do not have enough people with the right skills in the right jobs doing the right things. If the Bill provides people with the reassurance that they can start a family and then return to work we may even see an increase in fertility rates. I realise that that is not the purpose of the Bill, but let us talk about it anyway, in an open and honest fashion.

I have very much enjoyed taking part in the debate. The Bill is excellent. I seem to be spending an unnatural amount of time voting with my Labour colleagues, although we shall probably not vote on this measure. I commend the Bill to the House and am grateful to have been allowed to make a short contribution.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry) 4:36 pm, 18th January 2006

It will probably come as no surprise for the House to learn that we do not always see eye to eye with Labour Members—[Hon. Members: "Shame."] We get it right more often than they do.

On this occasion, I am glad to welcome the Bill warmly on behalf of the Scottish National party and Plaid Cymru. It contains important measures that will benefit families throughout Scotland and Wales and, indeed, England.

It is many years since my children were born, but these rights will make a huge difference to families. When my children were born I was self-employed and could change my work patterns so that I could spend time at home with them in the early days. But how many of those who shared the joy of the antenatal clinic with me were able to do the same? If the Bill becomes law, more and more people will be able to take advantage of it, and anything that is good for the family is a very good thing indeed.

Some points need further examination. On Second Reading and earlier this afternoon, I raised the question of the structure of paternity and maternity leave. It is a shame that there is no opportunity for both parents to take leave at the same time. That is a defect in the legislation. We talked about the possibility of a review in a few years' time and I hope that that is one of the things that will be considered. These are new rights and they will take time to bed in, so we need to see how they work as time goes on.

We have talked about the importance of children spending their formative years with their parents. They need time with both parents. The arrival of a child can be a traumatic event for a family. It changes people's lives in ways that they had not envisaged and to spend time together with their child is important.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

A new child is often likened to having a house guest who never leaves.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

And probably costs much more, but we will not go there.

On Second Reading, I referred to surrogate parents. The Under-Secretary of State for Trade and Industry, Mr. Sutcliffe, wrote to me with detailed reasons as to why, in his opinion, the provisions relating to them should be introduced. I was not entirely convinced by his argument. Society is changing and the numbers involved would be low, although they may increase in future—I do not have a crystal ball so I do not know. Only a small group of people are involved and their situation is very similar to that of adoptive parents, so I hope that it can be reconsidered in a future review. I accept that we cannot do everything at once.

We have heard about the impact on business. That is a relevant consideration. Business is in many ways the lifeblood of the nation—we need business to give employment, to create wealth—and we must be careful of the impact. Again, we must see how that beds in over the years.

It is unfortunate that new clause 1 was not passed, because it would have allowed some of the administration to be transferred to the Inland Revenue. Again, that issue may have to be reviewed, because of the impact on small businesses. Those of us who have run small businesses know what it is like to deal with both the business and the huge amount of associated red tape and regulation.

Family-friendly hours are important. If Ministers wish to push that issue further forward, I make the small suggestion that they should have a chat with the Leader of the House to see whether he could align recesses more with school holidays in Scotland and Northern Ireland, as that would help many hon. Members considerably—just a quick, self-interested suggestion.

The other part of the Bill to which I give a warm welcome is the right to request flexible working. Although the right is fairly restricted—it is only a right to request—it is an important step forward. I had a meeting with carers in my constituency last Friday to discuss the report, "Care 21: Exploring the Future of Unpaid Care in Scotland", which has been commissioned by the Scottish Executive. The phrase "unpaid care" gives hon. Members an idea—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I appreciate what the hon. Gentleman is saying, but I ask him to confine his remarks to the Bill.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I am coming back to the Bill, Madam Deputy Speaker, but I take your admonition.

My point is that that report impinges on what is happening in the House in the context of the work of the Department for Work and Pensions and employment regulations. By introducing such regulations, we are giving carers the option to seek flexible working. Many carers of disabled or elderly relatives find that they end up having to give up work, because there is no such flexibility. That often puts them into a cycle of benefit dependency and poverty. We are taking the first step to change that by giving carers much more flexibility. That is very welcome.

All in all, we strongly welcome this very good Bill, which will provide a good way forward. I hope that changes in future reviews will extend the legislation even further, because it is important and I welcome it.

Photo of Peter Bone Peter Bone Conservative, Wellingborough 4:42 pm, 18th January 2006

A family-friendly Bill is bound to be welcomed by Conservative Members, and I certainly do so. This is the first time that, as a new Member, I have had the pleasure of seeing a Bill pass through all its stages in the House of Commons, and I do not think that people outside the House realise the amount of scrutiny and work involved and the give and take in which the Government have seen fit to take part with the Bill. That has been impressive, and I welcome it.

Just two points concern me. My hon. Friend Mrs. Laing mentioned her four-year-old. I have a five-year-old, and one great thing about the House is the Parliament Channel, so that he can see daddy now and again.

Photo of Eleanor Laing Eleanor Laing Shadow Minister (Women and Equality)

At least he can wave hello to daddy. [Laughter.]

Photo of Peter Bone Peter Bone Conservative, Wellingborough

I used to run a small business, and every employee was female and either had children or could have had children. One of the things that the Government sometimes forget is that, to a small business, its employees are the most important asset. I can remember giving time off to employees, because they needed to go home because their children were sick, and providing flexible working. We did that automatically—we did not need regulation to do so—but I understand that some companies might not do so and might need regulation.

As I said in Committee, what concerns me is the cost of such regulation to small businesses. The one thing that I would have hoped that the Government would take on board, as happens in other countries, is that the cost of that regulation should be reimbursed to the employers. I think that that needs to be examined at some time in the future because it is important for small businesses.

Although the Bill will look after mothers who want to go back to work, it will have little impact on mothers who choose to stay at home to bring their children up—full-time mothers. It is a shame that there is such an omission from the Bill. I hope that the Government will examine the matter again and give encouragement to mothers who want to stay at home full-time instead of going back to work.

Photo of Alan Johnson Alan Johnson Secretary of State for Trade and Industry 4:45 pm, 18th January 2006

With the leave of the House, Madam Deputy Speaker, I want to say a couple of things in response to the debate, albeit without eating into the hours available for the Adjournment debate on parish councils.

I pay tribute to Mrs. Laing for her contribution. Indeed, I feel like awarding her a prize—perhaps a Terry's Chocolate Orange straight from the checkout of WH Smith—because she was very brave to say how much she supports the Bill, including the measures on paternity leave, and how much she disagrees with her right hon. Friend the Leader of the Opposition.

I also congratulate the hon. Lady on raising the important matter of the marriage bar, which affected her mother. It does the House a service to think back because the marriage bar lasted until the late 1960s. Indeed, trade unions that stemmed from the civil service such as my own, the Communication Workers Union, kept the marriage bar for their employees into the early 1970s. Kim McKinlay, a great woman trade unionist, had to keep her maiden name and pretend that she was not married to prevent her from being sacked from her position as an assistant secretary with the union. I say this to many young girls, including my daughters, so that they understand what women have had to do to reverse a situation that, as the hon. Lady said, meant that women had to lose their senior positions in the civil service simply because they got married.

I thank Norman Lamb for his support for the Bill, and I shall respond to a couple of the points that he made. He talked about direct payments, and although the Under-Secretary of State for Trade and Industry, my hon. Friend Mr. Sutcliffe, dealt with this during the debate, I noticed—I was watching it on the telly—that the hon. Gentleman said that the problem with regulatory impact assessments is that because they are produced by the Government, there is a suspicion that they are meant to reinforce their argument. We really wanted the figures to come out differently. Nothing would have pleased us more than to find that we could introduce direct payments in the way in which we and the hon. Gentleman wanted. The startling figures of £75 million ongoing costs and a £1 million saving for small businesses were correct. We must remember that we are considering setting up a completely separate duplicate structure. The payroll experts from the CBI who met representatives from Her Majesty's Revenue and Customs agreed that the figures made it difficult to proceed. I assure the hon. Gentleman and other hon. Members that we want to help small businesses. If we cannot do that through the direct payments route because of the stark figures and statistics, we shall look for other ways.

Photo of Norman Lamb Norman Lamb Shadow Secretary of State (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

Would those other ways perhaps include adjusting the percentage repayment for statutory maternity and paternity pay—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I am afraid that I will have to ask the hon. Gentleman to take that up with the Secretary of State at a more appropriate time because the matter is not included in the Bill.

Photo of Alan Johnson Alan Johnson Secretary of State for Trade and Industry

The hon. Member for North Norfolk also talked about full consultation on hours and whether four weeks' paid holiday would be additional to eight bank holiday days. We shall consult carefully on that and on whether we should phase the introduction.

My hon. Friend Julie Morgan made a good speech. She and the hon. Members for Angus (Mr. Weir) and for North Norfolk talked about extending the right to request. If we look at what is happening in British workplaces, we see that the fact that parents of children under six and disabled children under 18 have the right to request flexible working means that employers, in complying with those requests, are seeing the benefit of flexible working in general. As Mr. Bone pointed out, if employers were not doing that before, they are now saying, particularly in small businesses, that they ought to make flexible working available to all their staff because they see the benefits.

We need to examine the matter further; we said in our election manifesto that we would do so. We should recognise that the whole culture in the workplace is shifting, and it will shift even further when the age discrimination legislation comes in later this year and people have the right to request to work after 65.

I thank my hon. Friend Mr. Khan, who reminded us how far we have come since 1997. I thank the hon. Members for Broxbourne (Mr. Walker), for Angus and for Wellingborough for their considered responses. This has been a tremendous scrutiny process.

Finally, I thank my hon. Friends the Members for Bradford, South and for Sheffield, Heeley (Meg Munn). I am lucky indeed to have two such talented Ministers in my team. The praise that they have received from both sides of the House is testament to their skill. With that, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed.