Work and Families Bill

Part of the debate – in the House of Lords at 5:30 pm on 25th April 2006.

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Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions) 5:30 pm, 25th April 2006

My Lords, I hope I do not disappoint the House. The noble Baroness, Lady Morris, argued her case eloquently, and then anticipated what I was going to say. There is a bit of rough and ready about the current system; I do not deny that. One of the complaints that the noble Baroness did not make but that has been made is that it is open to abuse. We do not think that there is evidence of a considerable degree of abuse. We have concerns that making changes in the ways the noble Baroness suggested would actually bring much greater complexity to employers. It is also worth making the point that her amendment deals with a case in terms of taking unusually high earnings and managing them down. It does not deal with the opposite case of a period in which a woman might receive unusually low earnings, and manage it up. I will come on to the Pregnant Workers Directive in a moment because that presents a challenge in this area; I will not say more than that.

There is no question that this has been debated over the years, and there has been a constant search for a system that balances the needs of fairness and simplicity for both employers and employees. The Government have talked to interested parties, and I assure the noble Baroness that we continue to do so. She is right that, following our debate at Committee, my officials met representatives of the Prudential to discuss this matter further. We will continue to do that. I understand the point she makes; that we are shortly coming to an end with the current legislation. We will continue, post that date, to talk to relevant parties. If we can find a solution in the future, of course we would have to consider further action.

I stress that a balance has to be made between getting it absolutely right in all ways and having a straightforward system for employers to administer. From the Department for Work and Pensions' point of view, this trade-off is consistently made. Noble Lords are always asking me about the simplification of the benefits regime. We are keen to do that but, again, there is a trade-off. We have a complex benefits system because, as legislation has gone through both Houses, amendments have been made and Members of both Houses have wanted to ensure that our benefits system is as sensitive as possible. This is the same type of trade-off that we have for statutory maternity pay.

There is a question of whether employees of their own volition, and employees and employers in collusion, are seeking to abuse the current system. Obviously, it is difficult to come to absolutely hard and fast conclusions in researching this. Colleagues at Her Majesty's Revenue and Customs, who are responsible for monitoring compliance in this area, are aware that cases arise from time to time. There is no evidence that it is a significant problem, however. It is also worth noting that only 1 per cent of women getting SMP receive more than £1,000 a week for the first six weeks. Compared to very high bonuses, this is a small issue.

The House is inviting me to give a peroration on the Pregnant Workers Directive. I am not sure that I should go down that path. I can say that, following the meeting with Prudential, we received a letter from it relating, I suspect, to the legal points raised by the noble Baroness. We will look into that, and I will ensure that the noble Baroness receives a copy of any response to her points.

I would not want to hide behind the Pregnant Workers Directive. Although it is a challenge and a factor in any consideration, the Government's case rests on the fact that this is a tried and tested system. It is a bit rough and ready, but we are not persuaded that it operates so unsatisfactorily that we should move away from a pretty straightforward system for employers to administer, to one that would be far more complex. I assure the noble Baroness, however, that we will continue to talk about these issues.