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1.43 pm
Norman Lamb (North Norfolk) (LD): As the hon. Member for Hertford and Stortford (Mr. Prisk) suggested, this event is akin to an intermission. I suspect
the full Public Gallery has little to do with our current consideration of this exciting Bill. It is surprising that the public are not out getting their ice creams.As has been observed, the Bill is technical and uncontroversial. I congratulate the Paymaster General on keeping going and speaking about it for the third time for the best part of half an hour—a remarkable achievement. I thank her also for the way she has conducted herself during our deliberations on Second Reading, in Committee and on Report. In her speech she dealt with the one representation received, from the Institute of Chartered Accountants. Never before, I imagine, has one submission from a professional organisation received such detailed consideration by a Minister on the Floor of the House. Her constructive comments and response to those points were welcome.
On Second Reading there was one Back-Bench speech and a few valiant interventions from a Labour Member—the hon. Member for Wolverhampton, South-West (Rob Marris). In Committee, as we heard, no amendments were tabled by the Conservatives, the Liberal Democrats or the Government, and it was all over in one and a half sittings. There is little of substance to add today. In a moment, I shall mention one or two questions I have on the draft regulations.
To summarise, the Bill is largely a tidying-up measure that increases the ease with which employers and employees can deal with national insurance. First, for instance, it makes it easier for employers to recover national insurance contributions by agreement from employees and ex-employees in respect of securities-based earnings. Secondly, it allows employers and employees by agreement to transfer the liability for employers' national insurance to the employee in respect of restricted and convertible shares, extending the facility that is already available in respect of earnings from share options.
We accept that that reduces a current disincentive to employers, who may be put off rewarding employees in this way because of uncertainty about the extent of national insurance liability when what is known as a post-acquisition chargeable event occurs. The employer cannot predict what the share value will be and therefore what the national insurance liability will be. To remove that unpredictability seems entirely sensible. Like the hon. Member for Hertford and Stortford, we support the idea of improving and increasing employee share ownership.
The Bill deals with a number of miscellaneous issues, aligning periods of notice required for distraint action between tax and national insurance. It unifies powers with regard to tax and national insurance and to the gathering of information for tax and national insurance purposes, and it removes overbearing powers in relation to national insurance. That is to be welcomed. Finally, the Bill removes criminal penalties with regard to non-compliance for statutory sick pay and statutory maternity pay, with the introduction of civil penalties. The Government clearly recognise that criminal penalties are
- "wholly disproportionate to the compliance risk."
Since then, I have been through the draft regulations. I assume that that is the sum total of draft regulations; I should be grateful if the Minister confirmed that. Can she also confirm the time scale for implementation? In the draft Social Security Contributions (Amendment) Regulations—the first set of draft regulations—paragraph 2(2)(a) refers to "non-monetary earnings". However, paragraph 2(2)(b) refers instead to "relevant securities-based earnings". That relates to former employees. Is there a reason for the different terminology, or does the drafting need to be reviewed?
In the same regulation there is an obligation on the employer to account to the employee or former employee for the proceeds of sale of the securities that were not required to discharge the liability for national insurance—in other words, if there is an amount over and above that required for discharging liability, it needs to go back to the employee. Should there be an additional obligation to provide a statement to the employee confirming the sale proceeds and how much of it was required to discharge national insurance liability? That may have been covered elsewhere already, but I would again be grateful if the Paymaster General dealt with it.
Reference is made to the fact that the draft regulations impose no extra cost on business, but the proposed regulations relating to Northern Ireland would impose a cost in limited circumstances. That is entirely justifiable, but should not the explanatory notes make it clear? Further, is any regulatory impact assessment anticipated with regard to those regulations, or is the Paymaster General relying on the regulatory impact assessment that accompanied the Bill? I am not sure what the guidance on regulatory impact assessments says about that.
I want briefly to mention the proposed statutory sick pay and statutory maternity pay regulations. The explanatory notes say that no regulatory impact assessment has been prepared because the regulations do not impose any new costs on business, but the civil penalties may impose new costs, so is it accurate to say that no costs will be incurred? Will the Paymaster General deal with that?
There is also a statement that the draft Social Security Contributions (Amendment) Regulations, which deal with elections in relation to restricted and convertible shares, do not in themselves impose any new costs on business, but there are costs associated with the regulations. There is provision, for example, for the transfer of cost from the employer to the employee with regard to secondary class 1 contributions. The regulatory impact assessment refers to the cost of £3,000 in respect of professional advice on preparing a form of election and obtaining Inland Revenue approval. Will
the Paymaster General deal with that? Surely it is right that the explanatory notes to the regulations should be clear.Those are specific concerns about the draft regulations. I would be grateful if the Paymaster General dealt with them, either now or in a letter. These are important matters with regard to the detail of the regulations, but I can confirm that the Liberal Democrats support the thrust of the Bill.
1.52 pm
Dawn Primarolo: With the leave of the House, I should respond, perhaps briefly, to this afternoon's debate and the points raised by hon. Members. I sense that the House is gearing up to move on to other business, or perhaps those Members who were watching the monitor in their offices suddenly developed an undying interest in the Bill.
As I said in opening the debate, the Bill reduces the technical differences between the administration of tax and national insurance. It makes important improvements in the system and helps to protect employees' rights. We had a useful if not brief— [Interruption.]
Madam Deputy Speaker: Order. Will Members who have recently come into the Chamber please have some respect for the Paymaster General, who is on her feet concluding the debate?
Dawn Primarolo: The hon. Member for Hertford and Stortford (Mr. Prisk) referred to an intermission. When I was a child, the intermission was taken up by fish swimming around on television, which shows how old I am. I have a feeling that this intermission is quickly coming to an end.
This afternoon's debate has ensured that all Members and both sides of the House have agreed that we have undertaken detailed scrutiny of the measures before us. I hope that I have made it clear that we have been willing to respond to representations made to us. I should say to the Institute of Chartered Accountants that I was replying to its representation out of courtesy, as it was the only one we received. I sincerely hope, however, that hon. Members will accept that I am not setting a precedent here. None the less, everyone accepts that the main principles in the Bill are correct and recognises the importance of what we propose. A number of specific points have been made.
Ann McKechin (Glasgow, Maryhill) (Lab): Does my right hon. Friend share my concern over the former penalty for failure to pay statutory sick pay and statutory maternity pay, which involved a criminal sanction and which had not been used for many years? Can she confirm that the new civil measures will be used to impose appropriate sanctions, particularly given that the Equal Opportunities Commission has already started a major investigation into discrimination at work involving women in the workplace?
Dawn Primarolo: I regret that my hon. Friend was unable to join in this afternoon's debate, but I can
confirm that, in moving from the old procedures under the social security legislation, the Government are seeking to—[Interruption.]
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