Maternity Pay

HC Deb 20 April 1994 vol 241 cc991-1012 10.15 pm

The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague)

I beg to move, That the draft Maternity Allowance and Statutory Maternity Pay Regulations 1994, which were laid before this House on 24th March, be approved. The improved maternity payments introduced by these regulations—[Interruption.]

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. Will hon. Members leaving the Chamber do so quietly, please?

Mr. Hague

The improved maternity payments introduced by these regulations will benefit about 285,000 women a year and 90,000 women a year will be entitled to the higher rate of statutory maternity pay for the first time. Women will have greater freedom about when to start their maternity leave. At the same time, the scheme has been simplified to make it easier for employers to administer.

The regulations before the House amend the statutory maternity pay and maternity allowance schemes and comply with the maternity pay provisions of the European Community directive on the protection of pregnant women at work, which was adopted in October 1992, following negotiation between member states.

The Trade Union Reform and Employment Rights Act 1993 implements the directive's employment protection requirements, including the right to 14 weeks statutory maternity leave.

The changes to the maternity schemes will be as follows. The higher rate of statutory maternity pay—90 per cent. of pay—will be payable for the first six weeks to all women who qualify. The lower rate of statutory maternity pay and maternity allowance for employees will be increased to £52.50 per week to equal the higher rate of statutory sick pay. There will be one employment test of 26 weeks for statutory maternity pay, with the two and five-year employment tests for higher rate SMP abolished. The test period for maternity allowance will be increased from 52 weeks to 66 weeks, giving more women the chance to qualify.

Women will now have the freedom to choose when their maternity leave and pay should start, the only exception being where a woman suffers from a pregnancy-related illness in the six weeks before her baby is expected.

The amount of statutory maternity pay reimbursed to employers will be reduced to 92 per cent. but full reimbursement will be retained for small businesses.

The new provisions will be introduced at the same time as the new maternity leave and dismissal provisions and will apply to all women expecting a baby on or after 16 October.

Mr. Alex Carlile (Montgomery)

Does the hon. Gentleman agree that one of the results of the changes will be to leave self-employed women at an even greater disadvantage than before? Do the Government have any proposals to assist self-employed women who become pregnant and would like to take maternity leave?

Mr. Hague

The hon. and learned Gentleman is mistaken if he thinks that the position of self-employed women is changed in any respect by the regulations. They are not placed at any disadvantage.

The regulations do not concern self-employed women. Self-employed people continue to get a very good deal from the national insurance system. A self-employed woman on earnings equivalent to average pay will be paying about one third of the contributions paid in respect of an employed women in the same position, so that has to be borne in mind.

To move on to the specific regulations, regulation I allows for the new maternity benefits to apply to women expecting a baby on or after 16 October. The first payments for those women under the new rules will be made from the end of July, as women can take maternity leave up to 11 weeks before their baby is expected. It also allows for the SMP reimbursement rate to be reduced to 92 per cent. from 4 September.

Mr. John Wilkinson (Ruislip-Northwood)

My hon. Friend is speaking very quickly and when Ministers speak quickly something quite important could pass the notice of the House. Is it not a fact that, as required by European Community directive 92/85, the regulation will mean that employers' reimbursement rates for administering and paying state maternity benefits will be reduced from 104.5 per cent. to 92 per cent? Is this not contrary to Her Majesty's Government's declared intention of reducing the burdens upon employers? Is it not an extra tax upon those who provide employment and is it not another tax imposed at the behest of the European Community?

Mr. Hague

My hon. Friend is correct in pointing out that the reimbursement rate is reduced from 104 per cent. to 92 per cent., although it is important to understand that small employers—about two thirds of all employers—do not have any reduction in their reimbursement rate, so they are in no way penalised.

The regulation does call for an additional contribution from employers, and the Government think that it is right that they should make some contribution to these improved levels of maternity pay. After all, in much of the rest of the European Community employers have to fund about 50 per cent. of the maternity pay entitlement. So employers can at least reflect on the fact that in this country 92 per cent. is provided by the state, with 104 per cent. provided in the case of small employers. Regulation 2 deals with the rate of maternity allowance and entitlement conditions.

Regulation 3 starts the maternity pay period no later than the week after that in which the baby is born. At present, it starts no later than the sixth week before that in which the baby is expected. In addition, a woman working after the sixth week loses one week's maternity pay for each week or part week worked. The regulation will allow women to start their maternity leave and pay at a time when they feel it is best for them without losing benefit. The only exception will be where a woman ceases work after the sixth week before the baby is due because she is sick for reasons relating to her pregnancy. Her maternity leave will start at that point.

Another improvement allows women who are claiming statutory sick pay for reasons not related to their pregnancy at the sixth week before the expected birth to continue claiming statutory sick pay until the baby is born. At present, SSP cannot be paid beyond the sixth week regardless of the cause of illness.

Regulation 4 deals with the rate of statutory maternity pay. It ensures that all recipients receive the higher rate for the first six weeks. It increases the lower rate to £52.50 —an increase of £3.70—for the remaining 12 weeks. The regulation also abolishes the two-year service test for full-time employees and the five-year service test for part-time workers qualifying for the higher rate, leaving one simple employment test of 26 weeks.

Regulation 5 covers the new reimbursement arrangements referred to by my hon. Friend the Member for Ruislip-Northwood. The SMP reimbursement rate will be reduced from 104 per cent. to 92 per cent. to cover the £55 million cost of the improvements. Small employers will retain the 104 per cent. reimbursement rate and so will not have to pay a penny more. They will be defined as those whose total national insurance contribution payments in the previous tax year were £20,000 or less—the same definition that applies in the case of statutory sick pay. Regulation 6 then makes two minor consequential changes.

Some attention has been given to the contribution to be made by employers. The Government believe that it is right that employers should meet a small part of the cost of maternity pay for their employees during a period of leave from work. Employers in the United Kingdom should be compared with their counterparts in most other European Community states who contribute at least 50 per cent. of the cost of maternity pay. Furthermore, employers' national insurance contributions have been reduced by £830 million. That is £125 million more than the combined cost of this change and the change in statutory sick pay. Overall, employers will be better off as a result of the changes.

The changes are good news for 285,000 women. We have chosen a simpler option for implementing the changes so that there will be administrative benefits for business. We believe that it is reasonable to ask employers to meet the extra cost, given that the state continues to pay the lion's share—92 per cent—of maternity pay. We have not cut the level of state funding at all and small businesses will not pay a penny more. I commend the regulations to the House.

10.23 pm

Mr. Keith Bradley (Manchester, Withington)

The Labour party supports the improvements in the provision of maternity pay, maternity allowance and maternity leave but it is absolutely clear to us that the changes have been forced on the Government by an EC directive requiring that our maternity benefits be brought into line with those of other European countries.

Britain has been forced to improve its maternity benefits as part of the European social chapter. I agree entirely with my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) who, when the regulations were first published, commented in the press that the Government had been "dragged kicking and screaming" by Europe into introducing the enhanced benefits. Ironically, the opt-out from the chapter secured by the Government does not apply because the improvements were voted through before the Maastricht treaty was approved. If they had not been, the Government would have tried not to implement the EC directive and would not have supported the improvements. We must be clear about the Government's real position.

We welcome the improvements that the Minister has outlined briefly but it is worth repeating some of the crucial changes that will improve the position of women. The changes that we welcome include a reduction in the qualifying period for statutory maternity pay. In future, as the Minister said, women who have been employed in the same job—I stress that point—for 26 weeks will be eligible whereas, previously, they had to wait for two years in the case of full-time workers and five years in the case of part-time workers. Those changes will help about a fifth of pregnant women workers—a total of about 285,000—who will be able to claim the higher rate of statutory maternity pay.

We also welcome the fact that the sums have been increased, with statutory maternity pay comprising 90 per cent. of earnings for the first six weeks and a weekly £52.50, increased by £3.70 to the level of statutory sick pay, for the remaining 12 weeks. That was part of the directive which harmonised the rate of statutory sick pay with the rate of statutory maternity pay. We welcome the changes to the maternity allowance, which is paid to those women still not qualifying for the full benefit but who earn enough—more than £57 a week-to enable them to pay national insurance. Again, that has been increased under the proposals.

We also welcome the change from 52 to 66 weeks as the period relevant for the 26-week contribution record which is needed to claim the maternity allowance and the fact that women will be eligible for statutory sick pay if they are on sick leave for reasons other than pregnancy within the six weeks of that due date. Those are major improvements, but I stress that they are the consequence of the Government being forced to implement the EC directive, not of a general desire to improve conditions for pregnant women.

It is important that we continue to highlight the considerable and continuing problems with maternity provision. First, although the changes have been welcomed by many groups representing working women—for example, the Maternity Alliance and the Trades Union Congress—they stress that the changes do not go far enough. The Equal Opportunities Commission states that the United Kingdom still has the worst record on maternity pay in Europe, equivalent to only eight weeks' full pay. By comparison, women in Denmark receive the equivalent of 22 weeks' full pay and in Germany the equivalent of 14 weeks' pay. Therefore, even after those changes, the United Kingdom will still have a poor record in comparison with our European partners.

Secondly, earnings-related statutory maternity pay—the 90 per cent. of earnings—is available only for the first six weeks of leave, after which a woman must rely on the lower rate of statutory maternity pay, which is currently £52.50 a week, for a further 12 weeks. The organisations recognise that such a rate is not high enough to cover the true costs of pregnancy, birth and young children. We support that view.

Thirdly, the lower rate of statutory sick pay, to which the directive raises the new rate of statutory maternity pay, has not been uprated for the past four years, so its real value is nearly £15 less than it should be. If it had been uprated in line with prices over the past four years it would be £67.03 by now.

I must therefore ask the Minister whether statutory maternity pay will be uprated annually, or whether it will continue in line with statutory sick pay, which the Government have not uprated for four years. Or do the Government intend to uprate both statutory sick pay and statutory maternity pay annually, to ensure that they keep their real value?

Even now, not all women are guaranteed a minimum period of paid maternity leave. That flies in the face of the spirit of the directive, the purpose of which was to ensure that all women workers were guaranteed a minimum period of paid maternity leave. It is considered that to protect the safety and health of employed pregnant women and new mothers it is essential that they be statutorily entitled to such leave. We support that view.

One of the crucial problems is that even under the new arrangements the biggest group of losers will be those 20 per cent. of pregnant working women—one in five of them—who earn less than £57 a week, which is the lower earnings limit for national insurance contributions. Those women are excluded from the statutory maternity pay scheme. There seems no justification for such a limit, because statutory maternity pay is not a national insurance benefit. There is no direct relationship between national insurance contributions and statutory maternity pay, but still that qualifying level is used to distinguish between women who do and women who do not receive the pay.

Numerous examples have been supplied to us by many organisations. I pay tribute to the National Association of Citizens Advice Bureaux, which has supplied me with many examples of women who have suffered great hardship because of their lower earnings and consequent lack of entitlement to statutory maternity pay. Under the present rules, women are excluded from statutory maternity pay if, in the eight weeks immediately before the qualifying week, their earnings fall below the lower limit for national insurance contributions.

Two groups of women are affected by that rule. The first consists of women who are simply low-paid. The second consists of women whose earnings during that eight-week period may change and may be exceptionally low. Employers may be aware of the qualifying period and could—I stress the word "could"—manipulate wage rates during that period in some way, so as to deny women the opportunity to qualify.

We believe that the eight-week qualifying test should be replaced by a more representative sample of women's earnings. If over a longer period a woman has qualified, by earning the rates of pay that entitle her to statutory maternity pay because of her national insurance contributions, she should be eligible. She should not be denied.

The next major problem is the length of service requirement. By the 15th week before the expected week of childbirth, a woman must have been working for her employer continuously for 26 weeks. In the United Kingdom, there is no service requirement for statutory sick pay entitlement. Article 11(4) of the directive allows member states to tie entitlement to maternity payments to fulfilment of the conditions that apply to eligibility for sickness benefit.

I again request the Government to consider whether the service requirement for statutory maternity pay should be abolished so that women receive an income as of right during the relevant period. If the service requirement on statutory sick pay is harmonised, there should be full harmonisation. Decisions should not be made within that about who is eligible and who is not.

The next major problem is the qualifying period. As I have already stated, reducing the test for the higher rate of statutory maternity pay from two years of employment to 26 weeks will obviously enable more women to qualify and that move is, therefore, welcome. However, one group of women who have lost out in the past have been those who have been in continuous employment during the qualifying period, but who have not worked for the same employer throughout.

The Government claim to be keen to encourage mobility and flexibility in the work force. A woman employee who moves jobs should not be penalised if she becomes pregnant. Although paid through the employer, statutory maternity pay is still a state benefit and thus the amount payable should not be linked to a service agreement with one particular employer.

The next major problem is that, although women are entitled to 18 weeks' maternity pay, they are entitled to only 14 weeks' maternity leave. There is a major discrepancy in the new scheme between the right to pay and the right to leave. I ask the Minister what the point is of a right to 18 weeks' maternity pay if women have to return to work after 14 weeks. Can the Government estimate what their savings are from not harmonising at 18 weeks and from reducing by four weeks people's entitlement to leave?

One of the major issues, which was highlighted when the regulations were published and which continues to be a bone of contention, is the implication of reducing the employers' reimbursement for the cost of the new scheme. As we have heard from the Minister, the additional cost of the new scheme will be about £55 million a year. To pay for that, from 4 September, large employers will receive only 92 per cent. of their statutory maternity pay bill. That replaces the current rate of reimbursement of 104.5 per cent.

Smaller employers whose annual national insurance bill is less than £20,000 a year will continue to be fully reimbursed. As you know, Madam Deputy Speaker, from our previous debates on statutory sick pay, the Labour party is now the champion of small businesses and our policies are in place to ensure that that continues. Clearly, we welcome the fact that the Government now understand—

Mrs. Edwina Currie (Derbyshire, South)

Is the hon. Gentleman aware of serious concerns being expressed by employers of all sizes—those concerns have certainly been expressed to me—that improving the regulations, albeit in the interests of the women concerned and their babies, puts the future employment of pregnant women at risk?

Mr. Bradley

Yes. I welcome that intervention. I was coming to that point. I support in a general sense the sentiments that I think the hon. Lady is expressing.

It is clear that the Government have recognised that the fact that the Labour party is the friend of small businesses is a problem for them and they have, therefore, exempted small businesses from the proposals. However, there is still the issue of the transfer of costs on to business because of the provision. It is likely that the proposal to make employers pay part of the cost of statutory maternity pay will cause some to seek methods of avoidance. Concern has already been expressed by organisations; I am sure that the hon. Member for Derbyshire, South (Mrs. Currie) has received the briefing from the Institute of Directors that especially expressed concern on the matter.

When the maternity pay package was published, it provoked an array of negative headlines in the press, which I am sure that the hon. Member for Derbyshire, South read. There were headlines such as "Burdens on employers", "Employers dismayed by improvements in maternity benefits" and "Storm as more qualify for maternity cash".

In its report on the operation of the statutory sick pay and statutory maternity pay schemes in January 1993, the National Audit Office said that inspectors from the Contributions Agency had found that 29 per cent. of the statutory maternity pay cases that they examined contained monetary errors in the calculation. Also, employees were not always informed by their employers of their rights under that provision.

Obviously, the cost to employers of the new maternity pay is relatively low. However, while most employers would recognise that the amount that they are being asked to pay is minimal, what is at stake—I hope that the hon. Member for Derbyshire, South was making this point—is the fundamental principle of the gradual shift of social costs from Government on to employers.

The CBI, among other employers' organisations, is concerned that it will not be long before the cost of statutory maternity pay will be fully borne by employers, as is now the case with SSP. The CBI is worried that, although it may be considered only a small burden at the moment, with a reduction from 104 per cent. to 92 per cent., it is the start of a process, as we saw with SSP, to transfer all the burden on to business. At a time of a faltering economic recovery, the CBI considers any additional burdens to be inappropriate. There is a fundamental suspicion about whether it is a process that the Government will continue and that, perhaps, the next item will be family credit.

We would argue that employers will force down wages because they know that there is a subsidy through family credit which props up those bad employers who want to pay low wages. The Government may decide that they want to shift that burden on to employers and complete the circle.

As we have heard—it is probably relevant to raise the matter at this stage—under SSP, the Government are to undertake a study of the implications of the cost of introducing SSP, especially on small employers, to see whether the burden on small employers for the first four weeks is inappropriate. I would welcome the Minister's comments on how that study is going. I would also welcome his comments on the wider point of whether it is the Government's general intention to shift the burden of all social provision on to employers so that the Government may reduce public expenditure and so that, eventually, employers of all sizes will pick up the tab for improvements in provision for their employees.

Mrs. Teresa Gorman (Billericay)

In view of the hon. Gentleman's newly expressed interest in small businesses, would he address a problem that small businesses often bring to my attention—that of having to keep the job open for 14 and possibly, as the hon. Gentleman recommends, 18 weeks, when the woman concerned may decide—frequently decides—not to return to work? That is a real problem for small businesses. Would he tell us the Labour party's policy on that?

Mr. Bradley

I am pleased that the hon. Lady takes such great interest in my political career. I was not aware that she monitored—

Mr. Wilkinson

Get on with it and just answer the question.

Mr. Bradley

Labour Members are taking the debate seriously and I shall answer the question in the way that I feel most appropriate. Clearly, it is not a new problem for small businesses, as the hon. Lady would know if she had any knowledge of small businesses in the north-west, in which I and my hon. Friends have taken a great interest and which we have supported over many years. I shall come on to the point about the relationship between small businesses and employment practices.

We believe that the period up to October 1994 should have been used to strengthen enforcement of the statutory maternity scheme through the Contributions Agency and the Benefits Agency and to emphasise to employers the rights given through the Trade Union Reform and Employment Rights Act 1993 to workers who are dismissed due to pregnancy. That is a much more important point, because the percentage of women who have sought re-instatement in the past has been extremely small.

The right to appeal against dismissal does nothing to counteract the effect that the proposals will have on employers' recruitment policies. There is a danger that some employers will deliberately decide not to employ women who are likely to have children. That is a much more crucial point than the one that the hon. Member for Billericay (Mrs. Gorman) made about women who decide not to return to work. It is much more important that we ensure that we protect women who want to go into the workplace. Given the changes in the burden of costs on businesses, there is a danger that businesses in their employment and recruitment policies will deny women the right to enter the workplace. We are most concerned that that may be the implication of the Government's plans.

The Government have said that they are keen—I hope that the hon. Member for Billericay supports this—to encourage women to realise their potential in the workplace through the Government's initiatives such as Opportunity 2000. That means that employers' attitudes can be crucial in determining whether women return to work having had their baby instead of being dependent on benefits.

The package of recruitment policies, the policies that companies adopt towards women in respect of their training, the flexibility of companies and the opportunity for women to move in and out of the workplace are much more crucial—

Mr. Peter Thurnham (Bolton, North-East)

I am grateful to the hon. Gentleman for giving way. He said earlier that employers could use the family credit scheme to force wages down. He spoke of his great knowledge of the north-west employment scene. Can he give one example of an employer who has forced down wages in those circumstances?

Mr. Bradley

I was making a general point that it is clear that the Government are applauding themselves because the cost of family credit is rising. We must link the level of wages—only working people can receive family credit—with the abolition of wages councils. Throughout the country there are examples of wage rates down to £2 an hour. The result is that employees are claiming family credit to prop up their wages. If the hon. Gentleman does not recognise that, he knows little about the employment market in the north-west and throughout the country.

It is clear that the Government's proposals are an improvement on the previous position. We have made that clear from the start.

Mr. Bowen Wells (Hertford and Stortford)

Really?

Mr. Bradley

The hon. Gentleman would have heard me say that at the beginning of my remarks.

We are concerned, however, about the anomalies in the system and the fact that low-paid women do not gain any benefit from the proposals. The benefits that we are introducing still mean that we are at the bottom of the pile of European countries. We have flagged up our concern about the shift of the costs and burdens of social provision on to employees. We want to ensure that the provisions are only the starting point in the improvement of social provision, and especially maternity provision. We suspect that the Government have introduced them in spite of their opposition to the social chapter and fear that they will go no further in trying to make provisions that are at least as good as those of our European allies.

10.48 pm

Mr. John Wilkinson (Ruislip-Northwood)

I shall be brief. I would not pretend to be a social security buff or anything like it, but at the risk of mixing metaphors I can smell a rat when I see one.

On reading the regulations, the first thing that struck me was that it would be highly unlikely that the Government would introduce them were it not for the fact that they were bound to do so by European Community directive No. 9285. I wonder whether it is appropriate that we should be legislating in this area at the behest of the Community rather than in our own national interests according to our own lights and judgment and in view of British economic circumstances. That is the first and cardinal point that I shall make.

My second point—to reinforce the one I made earlier in an intervention on my hon. Friend the Minister—relates to the reduction of the reimbursement rate for all but the smallest employers. Later, my hon. Friend may be able to clarify the number of employers who will have to make additional contributions for the administration and payment of state maternity pay benefits as a consequence of the regulations. I do not know exactly what an annual national insurance bill of £20,000 constitutes, but all but the smallest companies will have to make additional contributions as a result of the regulations.

The explanatory note on the back of the statutory instrument says: An assessment of the compliance costs for employers … has been made and a copy has been placed in the libraries". I may not have heard accurately what my hon. Friend the Minister said earlier. If he quantified the amount that employers will have to contribute as a consequence of the regulations, I ask him to remind the House because I missed it. It is an important matter and the information should be available not only in the Library of the House for researchers and hon. Members but in the record of our debate this evening.

Businesses are struggling to come out of recession. They face too many burdens and cash flow remains a problem. In those circumstances, I do not see how it can help recovery and employment prospects to place additional burdens of this sort on all but the smallest employers.

My hon. Friend the Minister made a comparison with other European countries—implicitly, other Community countries. I do not call them Union countries yet; I call them Community countries, and I shall continue to do so. The point is that we live in a global economy. Our competitors are not principally our Community partners; they are the thriving, dynamic economies of Asia and South America. With the European Community so stuck in recession, it is necessary for Her Majesty's Government to comprehend that and to translate that comprehension into their legislative actions by pursuing a social programme which is not Eurocentric but related to the reality of the economic world in which we must live and compete.

It may be desirable—I am sure that it is, and I fully applaud the intention of those who are promoting the regulations at the behest of the Community—to do more for mothers who have to take leave to bear children. Nevertheless, the countries with which we must compete to a large extent do not have social costs of this sort. The more policy-makers in the United Kingdom are obsessed with such regulations and benefits, the more likely they are to forget the necessity of cutting the social burdens and social costs which are inhibiting growth and dynamism in the British economy, and the creation of new jobs across the nation.

This is an interesting debate. I know that my contribution has been an amateur one.

Mr. David Nicholson (Taunton)

Perhaps my hon. Friend will at least express gratitude that the individuals who may benefit from the regulations are not expecting to receive the grand sum of £300,000.

Mr. Wilkinson

I am always glad to express gratitude and to show magnanimity of spirit.

I conclude my remarks by focusing on a central point. It is more important for the United Kingdom—if our opt-out of the social chapter is to mean anything—to show that we are not necessarily bound to apply directives at the behest of Brussels. We must begin to pursue independent policies which are in the interest of our economy and our people.

10.55 pm

Mr. Alex Carlile (Montgomery)

I join with the expression of satisfaction that more women will be drawn within the potential of statutory maternity pay. It is right and proper that the European Union should seek to provide as high a level of maternity pay as is consistent with a modern economy.

The speech of the hon. Member for Ruislip-Northwood (Mr. Wilkinson) did not contain his recipe for the extent to which maternity pay should be paid. One suspects that the hon. Gentleman is not in favour of it at all.

Whatever the Government claim, this change is not, to quote one journalist who wrote recently, as much the gift horse as it sounds—for almost all the women who currently do fulfil the eligibility criteria will be better off sticking to the old system. That does not sound like a great improvement.

I should like to highlight five points. The first relates to administration costs. It is correct, as I and others have calculated, that the changes to the scheme will mean that employers will incur considerably increased implementation costs in the year 1994–95. Indeed, if it is to be a gift horse for anyone, it will be for those who make the computer software which will have to be put into the administrative systems of the companies running the scheme.

Larger employers will incur extra costs, but those will vary in accordance with the size and distribution of the work force and the nature of the pay system which is used. I have looked for examples of the changes which will take place. It looks as though a large supermarket chain with 100,000 employees—most of whom are women—will have to implement detailed changes. Those will include drafting procedures, training personnel and payroll staff, communication exercises and changes in computer software and will result in the chain having to spend about £300,000 extra.

Companies are bound to ask themselves whether it is worth employing women who are liable to become pregnant if they have to spend all that extra money. The hon. Member for Derbyshire, South (Mrs. Currie) suggested in an intervention that it may well lead to the employment of fewer married women and fewer women of child-bearing age.

Mr. Wells

Quite right.

Mr. Carlile

I hear the hon. Gentleman commending the view that fewer women of child-bearing age should be employed. I do not know whether he meant to intervene in that way.

Mr. Wells

I am grateful for the opportunity to give an explanation. I am not in favour of the effect which the hon. and learned Gentleman outlines. I would advocate the employment of women of child-bearing age as much, and as often, as possible. I was agreeing with him that the measure is likely to do the reverse. It will do serious harm to young women who are seeking to make their careers in business and in other ways, as they may not be employed in preference to young men and others.

Mr. Cartile

I am grateful for the hon. Gentleman's clarification. The answer is in the Government's hands. The Government have chosen to place the extra burden on businesses. That is not done by some of our European Union partners, who manage to deal with the problem in another way.

The second point I want to raise relates to the reasoning for passing on the costs to employers. As is to be expected, companies strongly object to the transfer of the administration of the scheme to employers. They also oppose the Government's suggestion that statutory maternity pay is a form of pay which should be financed by employers. It has to be borne in mind that employers already contribute significantly to the cost of statutory maternity arrangements through the maternity leave requirement.

Few companies, however, feel that they should have any responsibility to finance maternity pay, given that the majority of women who receive it do not return to work for those companies. That is another reason why employment of women of child-bearing age is likely to be reduced as a result of the changes unless the Government recognise their responsibility to pick up the cost of the difference.

CBI research suggests that only 7 per cent. of employers provide occupational maternity benefits, and that there is no analogy between statutory sick pay and statutory maternity pay because, while employers wish to control sickness absence, they have no reason to wish to control maternity absence if the women concerned are not going to go back to work for them anyway.

Mr. Nick Hawkins (Blackpool, South)

Surely measures such as this are introduced on the insistence of the European Union. Would not the hon. and learned Gentleman's party impose far more burdens on business, because it would lie down in front of the Brussels bulldozer and accept everything emanating from Brussels?

Mr. Carlile

I advise the hon. Gentleman to ask his own Secretary of State—or, rather, the then Secretary of State—why she accepted the proposals. I understand that the Government are commending the arrangements to the House, having entered into them voluntarily.

My third point relates directly to the impact on employment opportunities. By increasing the cost of employment, the Government's proposal is bound to reduce such opportunities for younger women. The additional costs, moreover, will not be evenly distributed across business. Some sectors have a high concentration of female workers: obvious examples are hairdressing and supermarkets, which employ a great many women. Those sectors are likely to find that they are not adequately compensated by the overall reduction in employers' national insurance contributions.

Smaller employers may also be disproportionately affected unless they are within the very small protected area of extremely small business that was mentioned earlier. At the very least, the small employer's relief for statutory sick pay and statutory maternity pay should operate on a uniform basis, in line with the system currently being considered for statutory sick pay. I hope that the Minister will explain why that is not currently the Government's view.

My fourth point relates to a broader issue—the question, in its broadest sense, of sexual discrimination against women. I think that a point raised by the Maternity Alliance at least merits an answer from the Government. The alliance encompasses not only trade unions and women's organisations, but a great many entirely objective and apolitical charities—voluntary organisations. It has attacked the Government for complicating what is already a complex system of maternity rights instead of trying to simplify the system. The Prime Minister has talked of cutting bureaucracy, form filling and bureaucratic complexity, but these proposals will do the exact opposite.

The Maternity Alliance says that maternity pay should be on a par with pay received during other forms of occupational leave. May I ask the Minister what real justification or logic exists for saying that statutory maternity pay should be on a different basis from sick or compassionate leave when employees generally receive full pay? Perhaps for economic reasons we cannot yet move to that situation, but it would be interesting to know whether the Government have any basis for saying that in future we should not aim to move to it.

In its briefings the Maternity Alliance says that by not adopting that approach the Government are guilty of sex discrimination, and it asks the Government to meet the cost of paying the higher statutory minimum, leaving employers to top it up. Perhaps the Minister will respond to that, especially as the Maternity Alliance represents a politically broad swathe of women of child-bearing age.

Fifthly, the changes that have been announced have been in the pipeline for a long time. There has been plenty of time to consider the mechanics of the European Union decision. The changes do not address the problem of the 2.25 million women in the United Kingdom who earn, as was said earlier, less than the lower earnings threshold of £56 a week. They will continue to be denied access to statutory maternity pay.

One of the purposes of the directive is to ensure that all women workers are guaranteed a minimum period of paid maternity leave. Maternity pay is not a national insurance benefit. There is no justification for continuing to exclude these very low-paid women from the maternity pay scheme.

I had intended to make five points but I have a sixth, and it is not "back to Janice": it is a genuine point. It relates to the self-employed, a matter that I raised in an intervention. There are many self-employed women in Britain, and they range from highly successful consultants—for example, I know some extremely successful women QCs—to women on low pay who, perhaps, visit their friends and neighbours to carry out their work as hairdressers, for which they receive small sums of money.

Many women in that spectrum are of child-bearing age. The Minister said that self-employed people have some advantages. I do not deny that, but I always thought that the Government set sufficient store by the initiative of those who chose to take the risk and insecurity of being self-employed to say that the advantages of self-employed status are there to take account of the problems of running a business with uneven cash flow and other difficulties.

Surely it is not right that self-employed women of child-bearing age should be in a totally different position from similar women who are employees. The time has come for the Government to do much more for self-employed women. One action that they could take is to ensure that they are given the same rights in relation to maternity pay.

11.7 pm

Mr. Richard Alexander (Newark)

I feel some unease about the regulations. It was not helped by the speech by the Opposition Front-Bench spokesman, the hon. Member for Manchester, Withington (Mr. Bradley) who, if I summarise him correctly, seemed to be asking for more of the same.

The much-quoted briefing from the Institute of Directors has alerted many of us to some of the implications of the measure. One part of the briefing that caught my eye was the reference to the fact that the measure may be contrary to the European Communities Act 1972. The institute raises the interesting argument that raising new taxes would be illegal and improper under the 1972 Act. When my hon. Friend replies, he may choose to discuss that interesting allegation.

Mr. Andrew Miller (Ellesmere Port and Neston)

Why does the hon. Gentleman think that the Institute of Directors did not bother to point that out when those issues were discussed last year during the passage of the Trade Union Reform and Employment Rights Act 1992? The Institute of Directors went to a great deal of trouble to brief Members on both sides of the House, as did many other Lobby organisations. It did not mention that point. Does the hon. Gentleman think that it is simply an afterthought or pure invention on the part of the institute?

Mr. Alexander

It is not for me to surmise the reasoning behind the Institute of Directors' thinking, but, as that point has been raised, it deserves an answer. I suggest to my hon. Friend that he may choose to respond to it.

My unease stems from the fact that we, the Conservative party, try to proclaim our support for people who try to run their own businesses, yet too often they say that the ratchet is being turned against them one notch more each time. I am uneasy lest the measure represents another small ratchet. We proclaim our hostility to anything that imposes social costs on industry and we have witnessed—especially those of us who have travelled in Europe—the effect of those burdens on industries in the rest of the European Community. Yet here we are, proposing to reduce reimbursement of statutory maternity pay to 92 per cent.—not a great deal, but it is another burden. It is one more turn of the screw.

The real question that the House must ask—I am not sure that it has been widely debated, canvassed or discussed—is, should the burden of statutory maternity pay fall on the employer or the taxpayer? Statutory maternity leave requirements are already imposed on the employer, and now the latest measure is imposed. If reimbursement is 92 per cent. today, will it be 50 per cent. in a few years' time? Will it be the lot in three or four years' time, gradually introduced under new regulations? I simply pass on to my hon. Friend the Minister my anxiety about the ease with which new burdens seem to be passed on to industry today.

I ask the House and my hon. Friend the Minister what benefit an employer receives by making the payment—or is it, as the institute suggests, another form of tax? It was said tonight that most employees do not return to the same employer when their period of maternity leave has gone by. The difficulty is that employers have no means of knowing how much the measure will cost them at a point in the future. It is a small amount at the moment, but it could be increased and we do not know whether it will be.

There is a special problem for companies with a high concentration of female employees, especially small employers. In some cases, as has been commented, it may militate against their taking on any female potential employees, and that is a worrying aspect of what we are doing.

The whole thing, as my hon. Friend the Minister has made clear, is a result of the EC pregnant workers directive. I say to him and to the House that it is another burden on business. It is another social cost to industry. I am a little surprised that the Government have not resisted the directive more robustly.

11.14 pm

Ms Ann Coffey (Stockport)

I welcome the implementation of the European directive with more enthusiasm than the Minister has shown to date. It will help thousands of women and their families who, because they work part time, have no entitlement to maternity leave or benefit.

Women now form 49.1 per cent. of the work force and 28.2 per cent. of all employees are part-time. Traditionally, women have used part-time work to combine their family responsibilities with their need to earn money, and employers have needed their contribution. But women have not been treated fairly. The nation would grind to a halt without the contribution of women's work, paid and unpaid—mostly unpaid—but women have had precious little recognition for that.

The benefits system has discriminated outrageously against women in part-time employment. It has denied them entitlement to unemployment benefit and sick pay, and their pensions have been affected in the long term. The recent Law Lords' ruling said that part-time workers who work more than eight hours should have the same employment rights as full-time workers. The Government are still considering that.

I hope that the implementation of the EC directive will be the beginning of many to come and will improve the position of women in part-time work, who seem to be invisible to the Government. Women do work and have children, and the nation can do without neither contribution. It is about time that women were treated more fairly.

There has been much discussion this evening about the parliamentary brief from the Institute of Directors, and I was concerned about some of the statements that it contained. For example, it said that the proposed changes to maternity benefit would damage both business and working women, and that business would be saddled with the social cost, which was bound to damage employment opportunities for women of child-bearing age. It said that the extra cost involved in employing women of child-bearing age could handicap their employment prospects.

Every time legislation that would improve the position of women is proposed, it is argued that, in the long term, it will discriminate against women. This evening, it has been argued that, because of the additional social cost which the Government have decided to place on employers, this measure would discriminate against women, so perhaps we should not go along with the EC directive. The same arguments were advanced about equal pay. At the time, it was said that it would discriminate against women's employment, but that prospect never came to pass.

The sum total of what the Institute of Directors seems to be saying is that employers will not employ women in case they get pregnant. This country has equal opportunities legislation and it is therefore not legal to discriminate against employees on the ground of sex or against women because employers think that they are a bad employment prospect. It will be interesting to see how effective that legislation is in the future.

My colleagues and I shall advise women to watch for any signs of discrimination from employers. I warn the Institute of Directors to remember that and advise companies of their legal responsibility under existing legislation. The suggestion that women should not be employed because of the social cost to employers is outrageous.

I do not regard this as solely a women's issue. It concerns families—parents being able to provide for themselves and their children and combine work and responsibilities to their children. The employment pattern is changing: part-time work benefits women, their families, and employers. It is extremely important that the contribution that women have made over the years is recognised and treated fairly. I therefore welcome the regulations and look forward to many more EC directives being debated in the House, as it is obvious that Europe has a more progressive attitude towards social legislation than we can expect from the Conservative Government.

11.18 pm

Mrs. Teresa Gorman (Billericay)

I should like to ask my hon. Friend the Minister one simple question. Does he want to get more jobs for people who want to work or does he just seek to obtain better benefits for those who are already in work? That is what the measure comes down to. It is a good example of politics doing harm by trying to do good.

The provision will price women out of jobs. It will not be immediately obvious, and will apply more to women who seek to enter the labour market—often for the first time. They will inevitably be viewed by some employers as a potentially more expensive source of labour than other available sources. That could advantage older women who have passed child-bearing age, so that women as a whole may not be harmed. But women with children or women of child-bearing age who wish to work will inevitably be affected to some extent because the regulations will colour the attitude of potential employers.

We have come out of an era when women were discriminated against if they got married. Not long ago women had to give up their job if they married—the civil service was the worst employer in that respect. Teachers and nurses had to give up their work if they married. We are entering an era where women may be discriminated against even more simply because they are of marriageable age. Their potential to have children will be seen by employers as a possible burden.

Nobody in the House seeks to improve the lot of women more than me. I am on the side of women, and I want to keep as wide a range of jobs open to them as possible. It is important for women to have the opportunity to go to work, obtain the experience of being at work and have the chance to go back to work without creating additional hidden burdens that make them less desirable as employees.

Mrs. Audrey Wise (Preston)

Will the hon. Lady give way?

Mrs. Gorman

If the hon. Lady will wait one moment I shall give way to her.

I want to say something from the employer's perspective. Women and politicians do not create jobs; employers do. It is important to consider how an employer views all regulations related to employment. People do not understand the notion of "Once bitten, twice shy". If an employer has experienced the difficulties of keeping a job open for a woman who has gone on maternity leave only to find that she does not return, it will influence his judgment the next time that he faces that prospect. One can take a horse to water, but one cannot make it drink. One can create wonderful employment conditions, but one cannot force an employer to adopt them. He may have to adopt them for existing employees, but his opinions and attitude will be coloured the next time that he considers employing staff. That worries me because, at that stage, women's interests are harmed by such regulations.

My hon. Friend the Minister said that only large employers would be affected. But many large employers—for example, as has been said, in the retail trade—employ women. It is important that those employers remain as open-minded as possible towards younger women. Such employment provides an important source of jobs for many women who want to work part-time or flexible hours, particularly in the retail trade. It is a golden opportunity for women to return to the labour market. We do not want to colour the attitude of employers, but their attitude is already coloured.

Anyone who shops at a supermarket knows jolly well that, in Britain, there is nobody available to pack groceries into bags. Shoppers have to unload the groceries out of their trollies and, while the girl is cashing up, all the goods flood down the other end so that shoppers have to rush backwards and forwards, shoving the shopping into plastic bags before the next lot arrives. In the United States one does not have that problem because there is an extra employee, usually a woman, at the other end of the line packing goods. Why? Because employees are not so overburdened with costs and hidden-cost regulations as to make them less attractive. Sainsbury, Tesco and Safeway are not being stingy, but trying to keep their risks as low as possible.

That is the simple reason why, if one goes to the movies, one is more likely to have to stumble one's way to one's seat in the dark than to have a young woman with a torch showing the way. Women are less attractive as employees. If they were more attractive and did not bring extra burdens with them, perhaps more of them would be employed.

Mr. Simon Burns (Chelmsford)

May I advise my hon. Friend that she need not go to the United States for those marvellous services? She has only to travel about four miles from her constituency to Chelmsford, where there is certainly one supermarket that provides them. The new Kingshead Meadow cinema has usherettes who show us to our seats with torches.

Mrs. Gorman

I thank my hon. Friend for his intervention and I give way to the hon. Lady.

Mrs. Wise

Does the hon. Lady accept that the directive does not compel the Government to put that burden on employers, but that the Government choose to do so?

Opposition Members do not want discrimination against employers who employ large numbers of women. The burden should be either on all employers or on the state. I remind the hon. Lady and the Government that all employers benefit ultimately from the fact that women continue to get pregnant. If they did not, where would the next generation of workers come from for any employer?

Mrs. Gorman

The hon. Lady's last point is irrefutable and I would not seek to quarrel with her.

I am concerned particularly about small employers. I have been one and I have represented them for many years before coming to the House. Small employers encounter enormous difficulties in keeping a job open. I know that the regulations do not yet apply to small employers, but only very small employers are exempt. Keeping open the job of a key employee—often a highly skilled and trained woman—for 14 weeks or more, possibly to find that she does not return to work, creates enormous difficulties and great disincentives.

As many medium-sized firms that face that problem will be included in the changes, I counsel the Minister to consider carefully whether the Government have their priorities right in adding any burden to businesses when the creation and retention of jobs is of paramount importance—a great deal more important than the miserable amount of tax money that the Government will raise in this manner.

Mr. Nirj Joseph Deva (Brentford and Isleworth)

Does my hon. Friend agree that this is yet another example of divisive, high-cost European legislation that we really do not want, but are lumbered with?

Mrs. Gorman

I entirely agree with my hon. Friend. Had he been here a little earlier, he would have heard that point being made very cogently and that is why I have not dealt with it.

I ask my hon. Friend the Minister to answer the point that I have now made twice, that the measure is not a job creation exercise and in the long term, it undermines the basis of the Government's employment policy—to get more jobs for more people.

11.27 pm

Mrs. Audrey Wise (Preston)

I rise to express my concern about those women who will not benefit from the regulations. I welcome the regulations as far as they go and note that they have been imposed on the Government. I regret that that is necessary, but my concern is for those women who earn less than £57 a week and do not benefit at all.

Women on low wages may depend on those wages just as much as any other worker. Those women and their families may be just as dependent on that small extra addition to the family income as those who earn much more. The fact that the wage is low does not mean that it is less important to the family and the loss of that wage can be extremely important. The lower the income, the less one can afford to lose any of it. I regret that the Government have not taken the opportunity to do something about it.

I remind the Minister that when the Select Committee on Health examined maternity services and published a report in March 1992 dealing with maternity pay, it unanimously disapproved of the present arrangements. We pointed out that not only do they disadvantage women on low wages, but they are administered in an extremely rigid manner which leads to great anomalies. The fact that a woman has to qualify over a specified eight-week period makes it extremely unfair in many cases. For example, if a woman is on a bonus or commission her earnings may drop during one or two weeks in the specified eight weeks, but over a longer period—perhaps three months—she would qualify.

As has been pointed out, there can be deliberate manipulation of the earnings pattern. Sheer accidents can occur, such as when a holiday falls and holiday pay accrues. It is quite wrong that this matter, which is so important to women, should be determined in a very arbitrary and anomalous manner. I am particularly disappointed that the Government have not addressed that point, especially considering that the Select Committee on Health drew their attention to it in a report which was widely welcomed. The Government have exposed the fact that they intend to do only the minimum and not a morsel more, or they would have looked in a much more general way—perhaps even in a slightly generous way—at the needs of women.

I deplore the attitude of hon. Members who think that because the Government choose to discriminate unfairly against employers of large numbers of women it is the women who should suffer. The answer to the needs of employers is entirely in the Government's hands. It seems to me that they are doing both employers of women and women themselves a great disservice in changing the funding arrangements.

I do not believe that employers should have to bear the cost of administering social benefit schemes. It is not fair; it is not part of an employer's job. I object particularly to the measure being used to discriminate against those who employ women. I object to employers thinking that the answer is to employ fewer women, but I object primarily to a Government who make it an issue at all.

As I said, the Government are ensuring that they do the barest minimum—that which they cannot evade or avoid—and not a fraction more. The women of this country — especially the low-paid—will draw their own conclusions from that.

11.32 pm

Mr. Bradley

With the leave of the House, I will sum up the debate. However, I will be extremely brief because I think that it is very important that the Minister answers the many points that have been raised by hon. Members on both sides of the House.

The debate has clearly exposed the splits over Europe among Government members. My comments at the beginning of the debate that the Government were dragged, kicking and screaming, into implementing the directive were proved correct by the contributions of Government Back Benchers.

I am grateful to Opposition Members—especially my hon. Friend the Member for Stockport and the hon. Member for Preston—for highlighting the weaknesses that still exist in the provision, particularly in relation to the lowest paid women in the work force who are below the national insurance contribution threshold and self-employed women, as the hon. and learned Member for Montgomery (Mr. Carlile) pointed out.

As my hon. Friend the Member for Preston said, the Government have decided to transfer the costs on to business. The £55 million bill could have been met by the Government to honour social provision and improve the rights of women workers in this country, but they have chosen to transfer the burden on to business. We shall be monitoring that provision—and that relating to statutory sick pay—to ascertain whether it is the thin end of the wedge as regards the transfer of the cost of social provision from the state to business.

As my hon. Friend the Member for Stockport said, it is absolutely right to have equal opportunities legislation and we shall be monitoring the impact of the provisions to ensure that women are not discriminated against, that their rights are upheld and that they continue to enjoy protection, whether they are in the workplace or at home on maternity leave.

It is essential that we know why the Government have not gone further to ensure proper provision under the regulations and for anomalies in the system to be explained. I shall therefore conclude my remarks in order to allow the Minister the maximum time possible to answer the questions that were asked not only by Opposition Members but by his Back-Bench colleagues.

11.35 pm

Mr. Hague

With the leave of the House, I shall indeed try to use the remaining time to answer as many as possible of the questions that have been asked and to do so without being vague.

My hon. Friend the Member for Newark (Mr. Alexander) said that the Institute of Directors had asked whether regulations made under the European Communities Act 1972 can be used for the purpose for which we are using them. The Government's understanding of the legal position is clear: the new reimbursement rate has been set to cover only the additional cost of the directive and, as such, is tax neutral for the taxpayer. Employers are not paying a tax; rather, they are now being asked to meet a small part of the cost of maternity pay for their employees. There is no difficulty of the type feared by the Institute of Directors in bringing forward the regulation under that Act.

My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) said that the Government would not be enacting the measure without the European Community directive. I have to tell him that the directive was negotiated with other member states and was changed substantially in the course of the negotiations. Without those changes, it would have imposed much greater costs on employers or taxpayers. He asked specifically about the number of employers affected. About 750,000 small employers will continue to receive the full reimbursement rate of 104 per cent. They are about two thirds of the total, which leaves about 500,000 who will pay more as a result. That sum involved is about £55 million.

As I said in my opening remarks, that must be seen against the background of a reduction in employers' national insurance contributions which totalled £830 million and which is £125 million greater than the cost of this change and the end of reimbursement of statutory sick pay.

Mr. Miller

rose—

Mr. Hague

I am sorry, but I cannot give way in the limited time available.

My hon. Friend the Member for Billericay (Mrs. Gorman) also asked us to remember the cost for employers and said that women would be priced out of the market. It may be a dangerous thing to say, but I shall have a small wager with my hon. Friend that women will play an increasingly important part in the work force and make an even greater contribution in future, notwithstanding the enactment of this measure.

The hon. and learned Member for Montgomery (Mr. Carlile) also mentioned the cost for employers. To put it in perspective, the amount in question is 0.03 per cent. of the national wage bill, although what he suggested—having maternity pay set at a level equivalent to occupational sick pay—would cost an additional £500 million. I am not sure how he and his party envisage financing such a commitment—perhaps it is a matter to which he should turn his thoughts. He also asked why the study of statutory sick pay for small employers could not embrace statutory maternity pay. The answer is that small employers are not affected by the measure. They continue to receive the full 104 per cent. reimbursement.

The hon. Member for Manchester, Withington (Mr. Bradley), speaking from the Opposition Front Bench, welcomed the measures. I recognise that and I thank him for it. He also asked about the difference between the 14-week and the 18-week entitlement. It is important to point out that 60 per cent. of women in the United Kingdom qualify for up to 40 weeks' maternity absence—the maximum—which is the longest period available in any member state of the European Community. To establish an 18-week minimum entitlement would add another £50 million to the cost of the measure. Again, the hon. Gentleman and his party need to think about where they would find the additional £50 million that they advocate spending.

The hon. Gentleman and several other hon. Members said that this country was behind the rest of the European Community in maternity provision. It should be borne in mind that the United Kingdom pays statutory maternity pay for longer than most EC countries, and is the only country with a centralised system of income support covering all categories of need. The United Kingdom and Luxembourg are the only countries that wholly finance maternity pay —that will still continue at 92 per cent. in this country. Moreover, 60 per cent. of women qualify for the full 40 weeks of maternity absence, the longest period in any member state.

If hon. Members wish to improve further on those provisions, as many of them have advocated, they must think about how they would finance their suggestions. Some of them have adopted a strange position. Within the past two hours Opposition Members have criticised the burdens put on employers by increasing the cost of maternity pay, yet they have also voted against increasing the Government's revenue. 'They have been most unwilling to say where they would find the money to finance more generous maternity pay, if it did not come from employers.

Mr. Miller

rose—

Mr. Hague

As the hon. Gentleman did not have the chance to speak in the debate, I shall let him intervene to tell us the answer to that question.

Mr. Miller

Earlier this evening, because the Minister was worried about his Back Benchers, he carefully explained to them that because of the increased employers' national insurance contributions the changes were tax neutral. Will he therefore go further and extend those provisions to adoptive mothers, because that would also be tax-neutral? Many of his Back Benchers would agree with him if he did that.

Mr. Hague

The hon. Gentleman has a strange understanding of what "tax-neutral" means. Today we have heard from some Opposition Members proposals for spending half a billion pounds of extra money. There is nothing tax-neutral about that; it would be extra money that would have to come from the taxpayer or be borrowed. Opposition Members have fought shy, as they always do, of putting forward any specific proposals on how they would finance their ideas. They have been content to pose as people who would improve conditions for some people by improving the rates of maternity pay and maternity allowance, without any idea of how they would go about it, or where they would find the money.

The hon. Member for Withington said several times that the Government had been dragged kicking and screaming into improving maternity pay—a comment originally made by the hon. Member for Glasgow, Garscadden (Mr. Dewar) when the announcement was made. Let me point out to the hon. Member for Withington that statutory maternity pay and maternity allowance are being increased for the whole 18-week payment period. The increase is not restricted to the 14-week period required by the directive.

Under the directive, the higher rate of statutory maternity pay payable to all women with 26 weeks' service could have been restricted. The directive said that any employment test must not exceed 52 weeks. We have gone for a 26-week service qualification for all. Women will also now be free to choose when to start their maternity leave and pay, which is an improvement not required by the directive. Furthermore, small employers will continue to be reimbursed in full—a healthy and helpful arrangement for them which, again, was not required by the directive.

That does not look to me like a list of proposals into which the Government have been dragged kicking and screaming. None of them was required by the directive that the hon. Gentleman said had imposed the changes on the Government.

The regulations will improve maternity pay for 285,000 women and will give the higher rates of maternity pay to 90,000 women each year for the first time. They should be welcomed by the House, and I hope that they will now be approved.

Question put and agreed to.

Resolved,

That the draft Maternity Allowance and Statutory Maternity Pay Regulations 1994, which were laid before this House on 24th March, be approved.