Work and Families Bill

I cannot give an estimate of the number, and it is not necessary to do so to make the case. The HMRC document confirms the fact that the employers’ representatives on the Government’s consultation panel advocated a system that would allow the right to transfer responsibility to the Government to be focused particularly on small employers. In essence, the new clause builds on the case put by the employers’ representatives on the Government’s panel and recognises the fact that large employers see no benefit in the proposed system. They are left out of the equation. The focus is simply on those employers who would benefit by transferring the system to the Government. According to the HMRC paper, small employers said that they would benefit. The paper also correctly recognises that every employer is different—employers have different payroll methods—so rather than simply seeking to transfer the responsibility for all payments to the Government, the new clause would give employees the power to decide whether they want to take advantage of the right. Under the new clause, we seek to recognise the facts that are set out in the HMRC document by excluding large employers, who would not benefit, from the right to transfer. The paper also confirms that approximately 40,000 women employed by small employers—those employers who make national insurance contributions of up to £45,000 per annum—are in receipt of statutory maternity pay. I cannot begin to estimate the cost of the Government employing an administration to operate on the opt-in principle dealt with in the new clause, but if we are talking about a total of 40,000 women and only a proportion of their employers choose to transfer, I can imagine that the size of the unit that would be required to administer the system for the Government could be very limited and therefore could be provided at vastly lower cost than that set out in the HMRC paper. The paper itself concedes that the costs would be significantly lower when dealing with an opt-in system of the sort that we recommend. I have already dealt with the net savings, but I want to say a word about whether we can rely on the figures set out in the Government’s paper. We all accept that any regulatory impact assessment is inevitably only an estimate, because it considers what would happen in the future. There must inevitably be doubt about how accurate those estimates are likely to be in practice. The concern of many in the small business community is that the paper underestimates the time taken to administer those arrangements, particularly by small employers who operate manual systems. The paper obviously considers average times for employers, but the new clause focuses on those small employers with manual systems who are trying to cope with everything, who do not have a director dedicated to dealing with payroll and staff issues and where a one-man or one-woman operation is trying to keep the whole show on the road, as well as dealing with all this. In those cases, learning and understanding what is involved in the payment of maternity or paternity pay, when the employer may not have had someone in that situation for some years, is a time-consuming operation. It is very easy to underestimate the burden that that imposes on employers. If that burden can be lifted and transferred to the Government—as they clearly envisage would be appropriate, provided that the costs are not too high—it seems right to do so.