HC Deb 09 March 1998 vol 308 cc21-56

'.—(1) A worker employed by a charity, a voluntary organisation, an associated fund-raising body or a statutory body does not qualify for the national minimum wage in respect of that employment if he receives, and under the terms of his employment (apart from this Act) is entitled to, —

  1. (a) no monetary payments of any description, or no monetary payments except in respect of expenses—
    1. (i) actually incurred in the performance of his duties; or
    2. (ii) reasonably estimated as likely to be or to have been so incurred; and
  2. (b) no benefits in kind of any description, or no benefits in kind other than the provision of some or all of his subsistence or of such accommodation as is reasonable in the circumstances of the employment.

(2) A person who would satisfy the conditions in subsection (1) above but for receiving monetary payments made solely for the purpose of providing him with means of subsistence shall be taken to satisfy those conditions if—

  1. (a) he is employed to do the work in question as a result of arrangements made between a charity acting in pursuance of its charitable purposes and the body for which the work is done; and
  2. (b) the work is done for a charity, a voluntary organisation, an associated fund-raising body or a statutory body.

(3) For the purposes of subsection (1)(b) above—

  1. (a) any training (other than that which a person necessarily acquires in the course of doing his work) shall be taken to be a benefit in kind; but
  2. (b) there shall be left out of account any training provided for the sole or main purpose of improving the worker's ability to perform the work which he has agreed to do.

(4) In this section— associated fund-raising body" means a body of persons the profits of which are applied wholly for the purposes of a charity or voluntary organisation; charity" means a body of persons, or the trustees of a trust, established for charitable purposes only; receive", in relation to a monetary payment or a benefit in kind, means receive in respect of, or otherwise in connection with, the employment in question (whether or not under the terms of the employment); statutory body" means a body established by or under an enactment (including an enactment comprised in Northern Ireland legislation); subsistence" means such subsistence as is reasonable in the circumstances of the employment in question, and does not include accommodation; voluntary organisation" means a body of persons, or the trustees of a trust, which is established only for charitable purposes (whether or not those purposes are charitable within the meaning of any rule of law), benevolent purposes or philanthropic purposes, but which is not a charity.'. — [Mr. Ian McCartney.]

Brought up, and read the First Time

3.33 pm
The Minister of State, Department of Trade and Industry (Mr. Ian McCartney)

I beg to move, That the clause be now read a Second time.

Madam Speaker

With this, it will be convenient to discuss the following: Amendment (a) to the proposed new clause, in subsection (1), leave out from 'he' to end of subsection (2)(b) and insert—

  1. '(a) works less than 20 hours per week in that employment,
  2. (b) receives remuneration and allowances (including the value of any benefits in kind except subsistence and accommodation which are reasonable having regard to the circumstances of the employment) which amount in aggregate to less than the equivalent of 10 times the hourly national minimum wage per week, and
  3. (c) is not in receipt of any state benefits other than the state retirement pension.
(2) Any payments made in respect of mileage allowance within the limits prescribed by Inland Revenue from time to time in respect of the Fixed Profit Car Scheme shall be disregarded for the purpose of calculating remuneration under (1)(b) above.'.

Amendment (b) to the proposed new clause, in subsection (1)(a)(ii), after 'incurred' insert 'or (iii) paid as mileage allowance within the limits prescribed by the Inland Revenue from time to time in respect of the Fixed Profit Car Scheme;'. Government amendment No. 20.

Mr. McCartney

Today's debate is another milestone in establishing a national minimum wage and in tackling poverty across the United Kingdom. The debate follows a failed filibuster by the official Opposition in the Standing Committee, where we had occasionally to debate for 26 and a half hours to make some proper progress on the Bill. Today, we see on the Opposition Benches a bedraggled army of fat cats, former fat cats and wannabe fat cats, who—both today and in the early hours of tomorrow morning—will undoubtedly try to promote their low-pay and no-pay strategy. The truth is that the official Opposition have lost the argument in the country and in Committee, and that they will lose it on the Floor of the House.

Mr. Andrew Lansley (South Cambridgeshire)

On a point of order, Madam Speaker. Is it in order for the Minister to refer to a filibuster in Standing Committee? That implies that some of the Standing Committee's debate was out of order. As a member of that Committee, I can say that at no point was the discussion substantially out of order.

Madam Speaker

I doubt very much whether there could have been a filibuster in Committee, as my Chairman in that Committee would not have allowed such a thing to happen.

Mr. McCartney

Madam Speaker, I did say that there was "a failed filibuster." The hon. Member for South Cambridgeshire (Mr. Lansley) would not in any circumstances have been able to hoodwink my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), who—with the hon. Member for Bournemouth, East (Mr. Atkinson)—brilliantly chaired the Committee. It was a failed filibuster—the attempt was abysmal—which is why we are now considering the Bill's Report stage on the Floor of the House.

Mr. Tim Boswell (Daventry)

In the middle of the Minister's various bits of rhetoric, he mentioned those who have failed not only in a filibuster but in being fat cats. As I presume that, at some stage, he will get round to speaking to new clause 1, would he like now to concede that, on the Opposition Benches, he is addressing a former chairman of the all-party group on charities and the voluntary sector?

Mr. McCartney

The hon. Gentleman is a bit of a wounded soldier; but I have not yet started. I did not mention any names, but we will undoubtedly be able to determine from the speeches made in the debate who are the fat cats, the wannabe fat cats and the failed fat cats.

Mr. Philip Hammond (Runnymede and Weybridge)

Who is fat?

Mr. McCartney

I am fat, but I am not a fat cat.

Mr. Barry Sheerman (Huddersfield)

Will my hon. Friend give way on that point of delay?

Mr. McCartney

I give way.

Mr. Sheerman

Everyone knows that the official Opposition are opposing the Bill tooth and claw. Will my hon. Friend confirm that there has already been delay in passing a measure which is hugely popular among the public? Will he tell the House by how much the Bill has been delayed by the official Opposition? Some hon. Members would like to know when, at the earliest opportunity, we can implement a minimum wage.

Mr. McCartney

I can reassure my hon. Friend that they have not delayed the Bill—they have failed to delay it. Furthermore, they will not be allowed to delay the Bill, because the Government regard its passage as an absolute policy priority. That is why we have so quickly brought the Bill back to the Floor of the House for its Report stage and Third Reading, after which it will proceed to the other place, and then—in double-quick time—on to the statute book. Its provisions will then be enjoyed by countless numbers of low-paid workers in the United Kingdom.

Government amendment No. 20 and new clause 1 would replace clause 42 on voluntary workers. I am pleased to say that the entire approach to the clause has been marked by a consensus both on our aims and on the means of achieving them. We want to ensure, first, that genuine volunteers—who give their time to good causes—are not caught up in the Bill's provisions. We want to ensure also that voluntary organisation staff members—all 485,000 of them—are entitled to the national minimum wage. I believe that there is a consensus on those aims, both within voluntary organisations and on both sides of the House.

When we discussed the volunteers issue in Committee, I made a commitment to re-examine clause 42, to ensure that it would work as we want it to. We have subsequently had intensive discussions with voluntary organisations. I have discussed the position also with the hon. Members for Daventry (Mr. Boswell) and for Eastleigh (Mr. Chidgey). 1 am pleased to say that the voluntary organisations have said that they support our approach. I think that we have got the matter right, and that our proposals incorporate in the Bill the reality of volunteering.

Before explaining the main differences between new clause 1 and the original clause 42, I should emphasise how the new clause is designed to work and how the Bill relates to volunteers, thereby clearing up any lingering confusion on the matter. The main point is that the Bill will apply only to workers, and that none of its clauses will apply to volunteers. Our judgment is that the vast majority who do volunteering work of one sort or another will not be affected in any way by the Bill, because they are not workers. That is what we want to achieve.

We are conscious, however, that there is a grey area. The definition of "worker" in clause 52 is quite wide, although no wider than the definition used for the purposes of provisions on unauthorised deductions in the Employment Rights Act 1996, which originated in the Wages Act 1986. Because of that, some genuine volunteers—although, we think, only a small proportion—might work under arrangements that would amount to a worker's contract. It is precisely those people—the Bill calls them "voluntary workers"—who are included accidentally, and whom we want to exclude through the "exit" of clause 42.

Let me briefly explain the main effects of new clause 1, and how it differs from the original clause 42. The overall effect is to broaden slightly the definition of "voluntary worker" to reflect the reality of volunteering. Subsection (1) broadens the range of bodies for which a voluntary worker may work while still falling within the exemption from the national minimum wage. It will now include not only charities and voluntary organisations, as before, but any "associated fund-raising body"—that is, a body separate from a charity or voluntary organisation but whose profits go to that organisation, such as a body running a charity's shops—and any "statutory body". Therefore, volunteers who work for charity shops, schools and hospitals, as well as for charities and voluntary organisations, and who happen to be workers, will be exempted from the national minimum wage.

Broadly speaking, the range of bodies covers volunteering in the whole statutory sector, but it does not cover volunteering in non-charitable commercial enterprises. To include that would undermine the Bill, and would go against the principle that volunteering should be for social good rather than a form of cheap labour for commercial profit.

In Committee, some technical questions were asked about the drafting. I have no difficulty with that. Just in case a sharp-eyed but puzzled Member is present, let me take the opportunity to enlighten him or her about a particular technical point of detail in the new clause: the inclusion in subsection (1) of the words "apart from this Act". The purpose of that is to prevent the exclusion provisions in clause 42 from being negated by the worker's entitlement to the national minimum wage under clause 15.

Subsection (1)(a) maintains the provision in the original clause that a voluntary worker may receive, or be entitled to, expenses actually incurred, or reasonably estimated as likely to be or to have been so incurred". That ensures that voluntary workers can be paid travel or out-of-pocket expenses without becoming "workers" entitled to the national minimum wage.

Subsection (1)(b) adds a new provision extending what a "voluntary worker" may receive while still being regarded as a voluntary worker, beyond "expenses", to include reasonable "benefits in kind". That consists of "subsistence"—the direct provision of day-to-day sustenance, but not monetary payment—or accommodation. It would cover, for example, the position of voluntary workers employed in youth hostels.

Subsection (2) further extends what a "voluntary worker" may receive to include a monetary payment of subsistence, but only in particular, narrowly defined circumstances. First, the voluntary worker must be employed by a "host" employer, having been placed there by a charity. Secondly, the host employer must be a charity, a voluntary organisation, an associated fund-raising body, such as a charity shop, or a statutory body such as a school or a hospital.

The provision is intended to cater for the position of organisations such as Community Service Volunteers—CSV—which place volunteers, often away from home, with schools, hospitals or voluntary organisations. Such volunteers receive a subsistence allowance to cover laundry expenses, toiletries and other basic day-to-day needs. The circumstances in which a subsistence payment is allowed, without generating an entitlement to the national minimum wage, are deliberately drawn narrowly to minimise the scope for evasion by employers claiming that they were paying their "volunteers" a subsistence allowance.

Subsection (3) extends what a "voluntary worker" may receive without generating an entitlement to the national minimum wage to include training, as long as that training is geared to the activity in which the voluntary worker is engaged. It would include, for example, first aid training for voluntary workers who care for old people or work with children. The provision is included to reflect the fact that voluntary workers often receive training, which may be regarded as generating a contractual arrangement.

Finally, subsection (4) contains definitions of terms used in new clause 1. Amendment No. 20 would delete the existing clause 42, which new clause 1 replaces.

I hope that, following the Government's open and consultative approach on the matter and the constructive input from voluntary organisations and hon. Members on both sides, the House will readily accept the Government amendments. They are good for volunteers, good for the Bill and entirely in line with the Government's approach to the national minimum wage. We have received a letter from the voluntary organisations accepting the amendments, which they believe meet their concerns and needs. I hope that the House will agree to them.

3.45 pm
Mr. Boswell

I sometimes feel that the Minister of State feels better once his press release is out of the way. If he has got it out of the way now, rather than delivering it on Third Reading, perhaps we can get back to today's business. Having been uncharitable about us in a way that was less worthy and convincing than usual, he then proceeded to deliver a new clause which included a measure of consensus. I would not advise my hon. Friends to contest the new clause and the associated Government amendment. No doubt they will wish to speak to their own amendments, and I shall embrace in my remarks some of the concerns on which they touch.

I thank the Minister for trying to bring forward a measure of consensus and for recognising the best traditions of the House in the commitment of hon. Members on both sides to the charitable and voluntary sector for which we feel a great deal of affection. However, in doing so, he managed to deny the argument in his quasi-press release.

If, as the Minister commented, there was a failed filibuster in Committee, he conceded almost in the same breath that the concerns that were expressed by my hon. Friends and me were essentially technical. In respect of the highly legal and complex matters involved—as I mentioned to the House, I had some involvement in charity law, although I hasten to say that it was as a lay person—it is essential that we get it right. Whatever purposes the Government have, we must ensure that they are not frustrated by some technical error.

Turning to the new clause, I should like to draw to the attention of the House a certain distinction. Although it is not a precise one, it is important that we should have at least the thrust of the argument in mind. There are what might loosely be called, to use a slightly Irish phrase, professional charities and amateur charities. The former are large, well-organised charities that employ staff, human resource directors, lawyers and others to advise them and are not represented by, but, in a sense, are reflected by, the National Council for Voluntary Organisations, with which I have had a constructive relationship on this Bill and others. In a way, they are not the problem, although they are the subject of the new clause.

Problems are much more likely to arise in respect of what might be called the amateur sector—although they are not amateurish—which comprises smaller charitable organisations that do not have full-time salaried staff, probably cannot afford access to the best legal advice, may go the Charity Commission from time to time and may be members of the NCVO, but are less closed with their definitions because their concern—goodness knows, it is the concern of us all—is to get on with the job of helping people through the various heads of charity.

That distinction is relevant to several aspects of the Bill that we shall consider. The big organisations that are professionally advised and have made an input to the Government will be able to steer around—or perhaps through—the new clause. They will manage. I am concerned about how the less sophisticated organisations that are less directed towards the day-to-day business of compliance with legislation will manage.

The Minister rightly said that there is no reason in principle why workers employed by a charity should not have the same right as others to receive the national minimum wage. He accurately quoted the NCVO's estimate of 485,000 people employed by charities. That is a significant number of employees. I am not suggesting that we should make an exception for them. In Committee, the Minister introduced a radical exemption for the armed forces, affecting fewer people than half the number in the charitable sector. We have already had that argument.

Mr. Ian McCartney

The armed forces are covered by the armed forces pay review body. That is an entirely different issue from volunteers.

Mr. Boswell

It has been a sadly prevalent practice of Governments of both colours for several years that the recommendations of the various review bodies are not always implemented immediately and in full. That could give rise to different treatment. However, that is the subject of a later amendment.

Mr. Hammond

Would my hon. Friend care to question the Minister on whether he would like to exclude nurses because they have a pay review body?

Mr. Boswell

I note my hon. Friend's suggestion, but I shall not be tempted at the moment.

I am not arguing that it is wrong for the salaried, professional—if I may use the word—employees of charities, many of whom are professional people, not to be able to enjoy the benefit of the national minimum wage.

The second category is volunteers who help charities. The Minister is nodding. He sees the clear distinction. I kick myself because only afterwards did I remember that probably the best example that we could have brought forward in Committee was the Low Pay Commission. The Minister's press release says that its members have undertaken to serve without remuneration. They are entitled to do that. I have not probed the point with the Minister, but I hope that they are receiving appropriate subsistence and expenses and do not have to pay their hotel bills wherever they go. Before the Minister says that I have it wrong, I wish to acknowledge the work of the Low Pay Commission—done on a voluntary basis.

Many people volunteer. I think that the NCVO's figure is about 3 million people. That is different from being paid to work for a charity. The Minister will know from our debates in Committee that the problem arises in between.

The Minister, who is nothing if not a practical man when he is in the mood, keeps saying that it is a matter of common sense to know whether a person is paid. However, on this issue as on others, the Government have found it difficult to ram the protean reality and constant complexity outside this place, which is well exemplified by the charity sector, into the mould that they have set for the national minimum wage, with a series of entitlements and criteria. If that mould does not fit, charities and the people who work for them have two choices. They can either change their arrangements or turn a blind eye to the legislation. One will probably end in tears, and the other will certainly result in difficulty. In the context of the new clause, it is difficult to make an absolute distinction between those who are volunteers and those who are not.

I know that there is a wish—it is a strong doctrine, certainly in professional parts of the charitable sector— that people should be remunerated on a professional basis for their professional services for charity and should, as it were, keep their charity for whatever else they choose to do. I understand that argument; it is certainly easier to sustain with a larger organisation than it is with a small one.

Some years ago, I made inquiries of a well-known charity about its terms and conditions of employment because I was thinking of applying for a job. I did not, in the event, pursue it—not because of the answer that I was given, I hasten to say. The charity suggested that its going rate was somewhat below the traditional going rate. I think that a figure of 25 per cent. was mentioned. That was at the beginning of my career. Such a rate is not by any means characteristic of all charities, although it is not unknown, even in larger charities.

The difficulty with which my hon. Friends and I have been wrestling in Committee is that some people would perfectly like to be associated with a charity on a professional basis. Indeed, the charity might benefit from that and welcome the professional status of workers who do not necessarily want to draw a full salary. Again, no doubt there might be ways of getting round the problem. It might be possible for citizens advice bureaux, for example—I heard this recently, and I think that the Minister did, too—to have a split contract. A body could have a charitable contract for, say, two days of the week, and a paid-for contract for three days. One's remuneration could be concentrated in such a way as to take it over the level of a national minimum wage. None the less, that would be a hassle and not always reflect reality. The Opposition therefore retain that concern.

I turn to the question of honoraria. The Minister seems to think that people who receive honoraria are not workers. I am pleased to hear that, in his terms, they are not. The nature of honoraria is such that they are paid probably on an eclectic basis and after the event. I envisage a situation in which a lady has looked after the village hall for years, probably paid for the stamps and written the letters. Suddenly, somebody says, "Good Lord, Mrs. X—or Miss Y—hasn't had any money for years! We have had a slightly better year than we thought and we want to send her a cheque or a bunch of flowers."

Such a situation would not normally be pursued by the tax authorities, and I particularly want it not to be pursued in the context of a national minimum wage, because it is a reality, certainly in the smaller charity sector. Not only money or principle comes into play. If it were necessary to compute the number of hours worked by that person and in what circumstances, it would be almost impossible. We may well—this may be the Minister's answer—have to turn Nelson's eye to such situations. We do not want to pursue such people, and I doubt very much whether they would want to assert their ultimate rights under the national minimum wage. Such situations are an uncomfortable irritant—even under the new clause.

Mr. Lansley

Does my hon. Friend recognise that disagreements among such persons—although they may be volunteering happily to work for the kind of village hall committee that he describes—may lead to one disgruntled former volunteer asserting that they were, in fact, employed and a worker for the purposes of the Bill?

Mr. Boswell

My hon. Friend is right to cite such a hard-line case. In such unpleasant circumstances, a decent and informal relationship breaks down into two camps—the Big-endians and Little-endians on the village hall committee—at which the book will be thrown. There may be difficulties.

My other concerns relate to the definition of allowable expenses. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) has tabled amendment (a) to the new clause to rehearse that. I share some of his unease about whether the criterion is sufficiently generous to meet the realities of the charitable sector.

There is also a question about the definitions of "associated fund-raising body" and "statutory body". The Minister covered that subject at some speed. I do not complain about that, but, as I understood it, he said that an "associated fund-raising body" would be, as it were, a fund-raising body attached to, but not part of, the charity, and that it would not be a charity shop, because if a person went to work for a charity shop as a volunteer for nothing, that was down to them, but if a person did take a salary or a wage, it would have to be at the national minimum wage because, otherwise, by implication, it would be out of line with the practice in other parts of the retail sector.

4 pm

Mr. Ian McCartney

The position is clear, is it not? We have tabled new clause 1, which clearly says that people who work for charity shops as volunteers will not fall under the terms of the Bill; but where a charity provides a full-time worker to manage a shop or a range of shops as part of their duties, they are clearly a worker and would be covered by the Bill. I believe that the amendment makes a clear and helpful distinction.

Mr. Boswell

That is clearer, and I am grateful to the Minister for that. The other question—

Mr. John Bercow (Buckingham)

The Minister has just offered us a cast iron distinction, which may well be applicable in most cases, but does my hon. Friend accept that it may not apply in certain cases? Are there not instances in which a person works in a charity shop, not for an honorarium but for a modest but regular payment that is below the national minimum wage, and in which, if the shop were obliged to pay that person the national minimum wage, it would have to cease to employ that person? Would not that be a most undesirable state of affairs?

Mr. Boswell

That is the substance of our concern.

Mr. Ian McCartney

indicated dissent.

Mr. Boswell

The Minister of State shakes his head, but I am sure that such cases will arise, and I am sure that such shops will fold, because, in some cases, they are at the margins of profitability, and they will no longer be able to do their service for the charity. We are worried about that.

Mr. McCartney

I am sorry to interrupt again, but, at the end of our discussions with the hon. Member for Eastleigh (Mr. Chidgey), the hon. Member for Daventry (Mr. Boswell) broadly agreed that the concept of the new clause met the objectives that we all wanted to achieve. The hon. Member for Buckingham (Mr. Bercow) said, in his short contribution, that that was not the case, and the hon. Member for Daventry has just agreed with him. If he agreed with me and the hon. Member for Eastleigh in my office, has he changed his mind since?

Mr. Boswell

I did make it clear to the hon. Gentleman—I do not renege on that—that I agreed that the new clause was a substantial improvement and met most of our objections. I said, however, that we had continuing anxieties in relation to minor payments—we may call them honoraria or whatever—about which I have spoken, and about the fact that persons might choose, or continue to choose, to work at what might be termed "non-fully national minimum wage rates". They will have to find a way of doing so.

The Minister has taken a firm view, as he is entitled to, saying that there will be no exceptions when persons are employed. I understand that. If that is the case, such people will have to find a device, either by the on-off, "switch the light bulb on" type of payment, which I have described, or by some type of covenanting back, if the Inland Revenue will allow it.

Mr. Bercow

I do not wish to delay my hon. Friend for a moment longer than is necessary, but will he accept—for the avoidance of doubt—that the situation that I described is not hypothetical, but relates to a constituent who has raised that point with me, and first did so several months ago?

Mr. Boswell

My hon. Friend is right. I recall that he mentioned his constituent in Committee.

Mr. McCartney

His mother.

Mr. Boswell

It was not his mother, as I recall, although the Minister of State is, as ever, trying to be helpful. In effect, we are trying to set out the sort of advice that we will have to give my hon. Friend's constituent.

The difficulty, particularly when dealing with sensitive areas such as charities, is that people do not want their generosity to be trespassed on, and will say, "If it's got to be done like that, I've never had a covenant with anyone." Or they will say that they will not work two days on one basis and one day on another, when that is not how they see their job. They will end up crashing out of employment. That is our wider concern with other parts of the Bill, and we certainly have that concern over this aspect of it, although that is in no sense to resile from the improvement that the Minister has made in the new clause. That is why I have invited my hon. Friends not to oppose it.

Mr. Lansley

Before my hon. Friend concludes on that point, did he observe that the Government asked the Low Pay Commission to consider the point at which an honorarium shades into a wage? Clearly, the Government have not received advice on that matter. Would it not have been advisable for Ministers to wait until they had such advice?

Mr. Boswell

My hon. Friend performs a service in reminding me that that is exactly what the Government did, and I endorse his advice. Later, I shall say that the whole business is back to front—it would have been better to set up the Low Pay Commission, await its advice and then debate its conclusions, not the other way round. No doubt, the commission will produce something and, in a modest way, our discussions will help to inform that.

Finally, on the overall impact of national minimum wage legislation on the charitable sector, the Minister has not sought to deny that there might be some such impact—as my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said, it was implicit in the Government's advice to the Low Pay Commission. Indeed, I suspect that the Minister would want to make a virtue of that in relation to persons employed in that sector.

Before he takes that wrongly, I am not arguing that the Opposition should object on principle to those extra costs. They will fall and they will be substantial. At one stage, I was minded—I resisted the temptation—to table an amendment asking for a deferment for charities and the voluntary sector. However, I understand that the Minister wants to have his Bill at one go, and we will not resist that. In turn, he needs to acknowledge that there will be some impact effects.

Again, I must quote the National Council for Voluntary Organisations, which has assessed the problem and suggested that, if the national minimum wage is set at £4.50 an hour, the sector is likely to require an additional £165.6 million to meet the increased salary bill.

Mr. Ivan Lewis (Bury, South)

As someone who has worked in the voluntary sector all my life and served on management committees, I find the hon. Gentleman's attitude towards the sector patronising. People who run and work for voluntary organisations and who really care about the voluntary sector strongly believe that we ought to encourage good practice. Part of that is paying properly people who work for voluntary organisations, thus ensuring that the people who depend on their services get the appropriate quality care.

Does the hon. Gentleman agree that people who care about the charitable sector should encourage good practice and have faith in the people who run voluntary organisations to understand the difference between those who are paid and those who are voluntary, and to stop pretending that those paid people are not capable of making such a distinction? The people who run voluntary organisations and who want them to provide the highest quality of care and introduce good practice in terms of employment law will welcome the national minimum wage.

Mr. Boswell

I shall reply briefly to that rather long intervention. First, we certainly accept that the charitable sector should have highly professional standards. I have told the House why it might be more difficult for the smaller and what I will in shorthand call the less professional charities. Secondly, I have not sought to resile from the principle of the national minimum wage that the Government are producing as regards the voluntary sector. Thirdly, I have just told the House that, on reflection, I decided not to table a dilatory amendment for the charitable sector. I was about to say that there would be some acknowledged costs.

I cited the figures from the NCVO research of £165 million if the rate is set at £4.50 an hour, and £87 million if it is set at £4 an hour—I round down the figures. If the rate is set at £.50, the cost would be an extra £41.8 million. There will also be additional costs involving the public sector, which is the subject of a later debate.

The NCVO also says that there will be a differential effect on the smaller organisations—those with annual incomes between £10,000 and £100,000 will face costs amounting to almost 5 per cent. of their current expenditure on staff. For larger organisations, the cost of a £4 rate would represent some 2.5 per cent. of current expenditure.

The question will arise—I do not want to go on about it now—how the voluntary organisations will seek to recover those costs. Will they receive money from local authorities? What will happen in relation to Government Departments?

Mr. Lansley

Before my hon. Friend leaves that point, will he acknowledge that the costs that voluntary organisations and charities may face could, to some extent, be offset by job substitution between paid, professional employees and volunteers? That could have deleterious effects for the charities—along the lines suggested by the hon. Member for Bury, South (Mr. Lewis—by diluting professional input.

Mr. Boswell

I think that it is self-evident—my hon. Friend performs a service in saying it-that if there is choice between two kinds of employment—one paid for, and the other not—and the costs of the paid-for employment are artificially raised by the operation of a national minimum wage, the balance between the two kinds of employment will be affected.

There will be a real impact on some of the larger charities. The Royal National Institute for Deaf People, which carried out some very helpful work in its submission to the Low Pay Commission, referred to the substantial impact on certain similar voluntary organisations. The costs will have to be met from somewhere, especially in cases where charities have entered a contract to provide services to a local authority or Government Department, for example.

Although most of those contracts are probably renegotiated annually, in relation to wages, one or two will have a longer tail—they will be in force for three or even five years—and the whole economics of the business will be upset by the introduction of the national minimum wage. If Government are not prepared to meet those obligations one way or another, the charitable sector will deliver less care.

Although we welcome the new clause, which provides a better definition than was available before, it leaves us uncomfortable on some points, which will require some kind of accommodation. I hope that the Minister will respond to some of the matters that I have raised and those that will be raised by my hon. Friends. The Bill will have a significant impact on the voluntary sector. The costs that will be incurred will need to be funded sooner or later by someone other than the charitable sector itself if the quantum and quality of care are not to be diminished.

Angela Smith (Basildon)

I welcome new clause 1, as it recognises the special nature of charities, voluntary organisations and the voluntary sector generally. As a former employee in the voluntary sector, a former volunteer and an officer of the all-party group, I take a special interest in the subject. The House should note that the umbrella organisations of the voluntary sector have never argued for their workers to be exempted from the minimum wage. As new clause 1 acknowledges, however, they have asked for a recognition of the special role of volunteers. The new clause recognises that volunteers receive, first, expenses and sustenance, and, secondly, training.

On Saturday evening, I attended a fund-raising event for St. Luke's hospice in my constituency. The number of volunteers who were present was incredible—people who freely give up their time, effort and energy and make a great commitment. Some of them were not only volunteers at St. Luke's hospice, but serial volunteers. At many events in my constituency—I am sure that other hon. Members have similar experiences—I meet the same people who volunteer to help others day in, day out.

If people give their time, energy and commitment, it is right that they should receive expenses if they wish. Many choose to take no reward for their activities, but the difference between expenses and remuneration— wages—should be recognised.

The new clause recognises the situation of those in training. I recently attended an event organised by the south-east Essex office of Relate. As the former Marriage Guidance Council, Relate has to ensure that its volunteers undergo proper training. Despite some of the comments of Conservative Members, being a volunteer does not mean being unprofessional or unqualified.

Volunteers have many skills and are often extremely professional. They should not be taken any less seriously because of their volunteer status. The people whom they seek to help and support have to be assured that they are being counselled or helped by someone who is fully trained.

4.15 pm

Amendments (a) and (b) are misguided and designed to avoid the minimum wage by the back door. It is wrong to suggest that someone who works fewer than 20 hours should be exempt. Those who do part-time work should receive the minimum wage, as should those involved in job sharing.

Mr. Bercow

The hon. Lady is making a general point, but will she consider the specific example of someone who works 15 hours a week for a charity shop, for a consideration of £2.50 an hour, thereby earning £37.50 a week? If the charity shop were obliged to pay the national minimum wage, at £3.50, £3.60 or £3.75 an hour, it would not be able to afford that person's services.

Angela Smith

The first thing I would say is something that we heard often in Committee: I blame myself for taking that intervention. Conservative Members clearly do not understand the difference between those who give their time, effort and energy and ask for recognition but not remuneration, and those who should be paid the minimum wage.

Mr. Bercow

Answer the point.

Angela Smith

I have answered it.

Amendment (b) represents another attempt to avoid the minimum wage by the back door. It would make it difficult to give appropriate training for volunteers.

Mr. Lansley

Will the hon. Lady give way?

Angela Smith

I have already given way once, and I want to make progress.

Mr. Bercow

Very wise.

Angela Smith

I am certainly wise not to take silly interventions from Conservative Members.

The new clause draws a careful distinction between those who should be treated as volunteers and not caught up in the minimum wage and those who are employed and should receive the minimum wage. I remind hon. Members of the views of voluntary bodies. The voluntary sector does not want exemptions that would allow it to avoid paying its staff the minimum wage, and Conservative Members should not try to foist those exemptions on the sector.

Mr. David Chidgey (Eastleigh)

The Minister opened the debate in his usual, perhaps almost charming, but certainly endearing and robust fashion.

Mr. Bercow


Mr. Chidgey

That is an even better word. We have become used to the Minister's style in the weeks, if not months, during which we have been locked together in Committee. I hope that the lasting impression does not prove too painful for his future career or his peace of mind. I do not want to be accused of filibustering, so I shall come to the point.

We welcome the new clause. The Bill as it stood would not have excluded millions of volunteers—in the public sector, in hospitals and schools, or working for charitable organisations-from the minimum wage. It would not have excluded volunteers who receive benefits in kind—expenses for meals, travel, accommodation, and health and hygiene when they are away from home, for example—that are essential to enable them to continue volunteering.

It is important that that issue be addressed. Both sides of the House accept that it is essential that volunteers should be able to perform the services they offer in the voluntary sector. It is also generally accepted that volunteers should never be used as a substitute for paid staff; that issue has been addressed in our discussions both inside and outside the House.

Volunteers add value. They make a valuable, indeed crucial, contribution to the level and quality of service that voluntary organisations, as well as some public sector organisations, provide in our communities. Many examples could be cited, and I listened with interest to the comments of the hon. Member for Basildon (Angela Smith). I am sure that all Members of Parliament work closely with their local charitable organisations. We could all talk at great length about the valuable services they provide, and how important it is for us to support them.

New clause 1 contains a number of issues that are worthy of further discussion, and I hope that we will learn a little more about the Minister's proposals in the course of our debate. In particular, I wish to address the issue of training provided to volunteers while they provide voluntary services. That is a grey area.

Mr. Lansley

On the question of training, does the hon. Gentleman agree that new clause 1 makes a spurious distinction between training that is specific to the work undertaken by a volunteer and training that is generic? It might be better for volunteers in the charitable sector if all training, specific or generic, were left out of account, so that they could benefit from training more generally.

Mr. Chidgey

The hon. Gentleman has a habit of second-guessing my remarks before I can make them. He raises an important point. As new clause 1 stands, it refers to limiting training to that required to perform the volunteer's duties. It is difficult to be so precise in that distinction. I am anxious that the new clause should not deprive volunteers of training in basic social skills, including numeracy and literacy, that might enable them to enter the job market and gain employment or undertake further training and education.

As I have mentioned to the Minister on an earlier occasion, the Prince's Trust has a fine record in training. People who have previously escaped the net of employment have found fulfilment in paid employment or further training after they have finished a project with the Prince's Trust. I am anxious that nothing in the new clause would preclude volunteers who work with the Prince's Trust from receiving that basic training in additional skills to enable them to achieve further fulfilment in their lives.

Mr. Ian McCartney

I can give the hon. Gentleman the reassurance he seeks, and I can go further. The Bill contains enabling clauses to deal with training issues, which the Low Pay Commission has been asked to consider and report on. It is worth while for the hon. Gentleman to raise those issues, but the Government have gone to great lengths to ensure that they are all addressed.

Mr. Chidgey

I am grateful to the Minister for that reassurance, but he will understand that it is difficult for Opposition Members to be sure of the Government's intentions, because we have been told so often that the Low Pay Commission will address the issue, but we are still waiting for it to report on so many issues. I am sure that the Government's intentions are honourable, but it is difficult for Opposition Members to be sure what will happen when we do not have the necessary information before us.

At the beginning of the debate, the Minister mentioned the status of limited companies that are set up as an adjunct to a recognised charity. Many of the national charities—including Oxfam and Age Concern—have limited companies that act independently as separate, commercial enterprises with the sole objective of raising money for the charity concerned.

I hope that the Minister can assure me that, under the new clause, the distinction between workers for the charity, workers for the enterprise and volunteers for both will be clear. That is important, because I agree with him that people who should be paid a wage must not be denied one because they are classified as volunteers.

The hon. Member for Daventry (Mr. Boswell) touched on a category that is better entitled "dual-capacity workers". Such people work some hours as volunteers and some as paid staff. There must be a clear distinction in the Bill between volunteering and employment. Such people should have employment contracts for the hours they agree to work with their employers as paid members of staff, but should also have volunteering agreements for the additional time that they wish to give voluntarily to the charitable organisation.

Examples come readily to mind. A scout leader may work some time for the Scout Association as a paid member of staff but readily volunteer his time at evenings or weekends as a scout troop leader—a clear distinction between volunteering and paid employment.

Mr. Boswell

The hon. Gentleman is making a good case. Does he accept that his suggestion of a contract for working and an agreement for voluntary work is probably, on my reading of the new clause, the only way forward for people in that situation?

Mr. Chidgey

I thank the hon. Gentleman for that intervention. That is precisely the point, and I look forward to the Minister clarifying it.

Hon. Members have also mentioned people who are semi-retired. I shall refer to such people as semi-retired, although there are other descriptions, such as "prematurely redundant", or that they have been given an opportunity to seek other employment—sacked, in other words. Many people, at a fit and robust age, earlier than they expected to retire, are able to contribute to society, but find that their remuneration through pension or redundancy is not enough to live on.

Angela Smith

Like Tory Ministers and MPs.

Mr. Chidgey

I shall refrain from responding to that remark. Hon. Members all start as volunteers. There is always a queue of people volunteering to take our jobs come general elections. I suppose that we are paid volunteers in that regard.

Many robust, fit people with much to offer society are not in full-time employment and have income from pension or redundancy payments that is not enough for them to live on comfortably. They want to be able to work for the voluntary sector but also need some remuneration.

It is for such people that contracts of employment and agreements for volunteering are so important. If they wish to work a number of hours per week at not less than the minimum wage to earn sufficient for their needs, we must distinguish between paid hours under working contracts and additional hours that people may wish to volunteer for under volunteering agreements. There is always a danger of coercion with such agreements. I should like some comfort from the Minister that the new clause will ensure that volunteer hours are a genuine gift of the time, not the result of coercion to work extra hours for what would be less than the national minimum wage.

It was an oversight that the Bill did not adequately address the treatment of volunteers. I am grateful to the Minister for the way in which he recognised that, and for how the Government have listened to the Opposition's arguments. As a result, the new clause goes a considerable way to allaying the concerns of the Opposition and of many people in the voluntary sector about the treatment of volunteers. We welcome the Bill and will support it, but I look forward to the Minister clarifying my concerns.

Mr. Hammond

As the Minister said, Conservative Members have opposed the principle of the Bill, but I hope that he recognises that, in Committee, we engaged constructively in seeking to improve the Bill and in identifying some of the areas of weakness within it. He accused the Opposition of having mounted a failed attack with a filibuster: in fact, we had a long, but extremely constructive and important, discussion, and one of the results is that we have three Government new clauses and 35 Government amendments on Report. I hope that the Minister has the good grace to recognise that the Committee discussion has given him an opportunity to deal with many issues.

Mr. Ian McCartney

I have to put it on record that most of the Government amendments are clarifications relating to other legislation passing through the House. There are few or no amendments of major substance, and, where such amendments have been tabled, that is down to the Government seeking to improve the Bill from our own perspective.

4.30 pm
Mr. Hammond

There we have it: the Government were not informed or illuminated at all by the debate in Committee, and all their new clauses and amendments would have been tabled anyway.

Mr. Bercow

Notwithstanding the Minister's intervention, will my hon. Friend confirm that, to his knowledge and from his recollection, not a single Labour Back Bencher sought to introduce a new clause or an amendment to an existing clause? All the pressure came from Opposition Members, which is testimony to the effectiveness of their contribution to the debate.

Mr. Hammond

I thank my hon. Friend for that intervention. I believe that he is correct, but I am pleased to note that that reticence has now evaporated, and that we are to consider later an amendment tabled by Government Back Benchers.

Notwithstanding the Minister's remarks, new clause 1 is the result of a constructive discussion held in Committee, and, as he said, the issue with which it deals commanded a real consensus on both sides of the Committee. The Minister has recognised the issue of voluntary workers and the special needs of the voluntary sector; however, his new clause does not deal with all the issues raised in Committee. In the opening sitting, the Minister said that there was no point in having a Standing Committee if it was simply going to be a dialogue of the deaf."—[Official Report, Standing Committee D, 13 January 1998; c. 22.] His response in the form of new clause 1 suggests that, if not a dialogue of the deaf, our Committee was perhaps a dialogue of the hard of hearing.

I am pleased to see that the Minister has dealt with the issue of subsistence. I raised that in relation the Youth Hostels Association and the problem of subsistence for those working for voluntary organisations. If included in the remuneration that they are considered to receive, it could result in their moving from being volunteers to being paid workers. The Government are clinging to the dogma of universality by insisting that there are only two possible categories of person working for a voluntary organisation: pure volunteers and people who are fully employed by that voluntary organisation. Common sense suggests that that is not the case, and that there are people who fall between those two categories.

Mr. Bercow

My hon. Friend and I have discussed this matter at length and on several occasions. Will he confirm that a number of individuals who straddle the divide to which he has referred work in his constituency?

Mr. Hammond

My hon. Friend is absolutely right. In Standing Committee, he and others of my hon. Friends were able to point to specific examples from within their own constituencies. Later in my speech, I hope to be able to deal with a specific example in my constituency and to ask the Minister to consider a case that I fear would be adversely affected, notwithstanding the fact that the drafting of new clause 1, which deals with voluntary workers, has been very much improved.

Someone who is in the fortunate position referred to by the hon. Member for Eastleigh (Mr. Chidgey) —perhaps in receipt of a pension and prematurely retired, with a little time available—may wish to help a voluntary organisation, but he may be unable to give his time entirely freely. There is a continuum between the pure volunteer, who works without any consideration, and the fully employed worker, whose primary motivation in working for an organisation is the remuneration that he receives. I had hoped that, in the time between Committee and today's debate, the Minister would address that issue as he considered the treatment of voluntary workers.

Mr. Andrew Rowe (Faversham and Mid-Kent)

There has been quite a lot of talk about being prematurely retired. One of the points we need to remember when talking about volunteering and volunteer organisations is that many people who retire at a perfectly reasonable time may well have 25 or 30 years of active life still ahead of them—and during some parts of that time, a small remuneration is often useful.

Mr. Hammond

I thank my hon. Friend for his contribution. A significant and growing number of people who may be able to contribute to a worthwhile cause, not just for a couple of years, but on a fairly long-term basis, would be prepared to do so for a wage or remuneration far below what they would be prepared to accept if they were working for a commercial organisation.

There may be a blend of motives between the desire to earn money and the desire to do worthwhile work for a worthwhile organisation. My hon. Friend the Member for Daventry (Mr. Boswell) and the hon. Member for Eastleigh have suggested that one solution would be for people in such positions to work part of their time as a volunteer, for nothing, and part as a paid worker. Such an artificial arrangement smacks of avoidance, and hardly brings the legislation into better standing. It would be far better were the Government to recognise explicitly that there may be a blend of motives between pure altruism and the desire to earn money, and to deal with that in a way that does not cause artificial avoidance.

Mr. Boswell

Does not my hon. Friend consider that clause 39, which involves the extension of the Act, under regulations, to certain other categories of workers— or persons who are treated as if they were workers—poses potential difficulties, even in relation to the suggestion that I put to the House?

Mr. Hammond

My hon. Friend is exactly right. A number of difficulties and potential pitfalls, not least relating to taxation and national insurance, might arise were people tempted to arrange their affairs in a strictly artificial way to deal with the absurd notion that the Government will not allow someone to have a mixed motive in seeking employment or work with a charity. They will not allow the halfway house.

Many decent, respectable people who are willing and anxious to make a contribution to the society in which they live, but who cannot, for one reason or another, afford to give their time totally freely, would be greatly offended by the measure as it now stands. It would be a gross infringement of their liberty and their right to provide good work in society in a way that is practical and convenient for them.

Mr. Lansley

I am listening carefully to my hon. Friend, and I realise that the difficulties proliferate. The new clause refers to statutory bodies. I know from my experience that honoraria paid to members of national health service trust boards are unlikely to correspond to the national minimum wage rate because of the number of hours they work. How does the new clause exclude such people from the definition of "worker"?

Mr. Hammond

I shall discuss later the jeopardy in which people will be placed if any sum they receive is considered to be remuneration under the Bill. The results would be dramatic: any money other than subsistence payments and reimbursement of expenses would be subject to the national minimum wage provisions.

Mr. Ian Stewart (Eccles)

Does not the hon. Gentleman understand that existing machinery will test the employment status of workers who qualify for the national minimum wage, and that there is a distinction between permanent or fixed-term contracts, whether they are full time, part time or casual, and unpaid voluntary work? The level of the minimum wage will not alter that one bit.

Mr. Hammond

I thank the hon. Gentleman for that intervention. Such machinery may exist, but the new clause will introduce new machinery. It states: no monetary payments of any description may be made except in respect of expenses—

  1. (i) actually incurred…or
  2. (ii) reasonably estimated as likely to be…incurred".
One of our concerns is that payments may not be made entirely and exclusively in respect of expenses that have been incurred.

I was not present at the Minister's meeting with my hon. Friend the Member for Daventry and the hon. Member for Eastleigh. I thank him for his invitation, but I was away on an all-party trip when it took place. Had I been present, I would have pressed the Minister about people who work few hours for low remuneration, whom we had in mind when we tabled amendment (a).

As the hon. Member for Basildon (Angela Smith) said, amendment (a) is a relatively blunt instrument to deal with the problem that we have identified.

Mr. Robert Syms (Poole)

My hon. Friend is making a persuasive case in respect of employees, but will not employers have to spend a great deal of money on legal advice to prevent enforcement notices from being served on them, which would be embarrassing, especially to public bodies?

Mr. Hammond

My hon. Friend is right: the cost, inconvenience and embarrassment may be significant. How will organisations that are affected as "employers" react to the jeopardy in which the new clause will place them?

Mr. Bercow

Before my hon. Friend leaves that important matter, has he taken on board the significance of the intervention of my hon. Friend the Member for Poole (Mr. Syms)? The loss that we are considering is of a different character from one that might be sustained by a commercial organisation—it is a monetary loss, and it would represent a deprivation to charity beneficiaries. The neediest people would lose because of these additional costs.

Mr. Hammond

My hon. Friend is absolutely right, and I assure him that I had not failed to take account of the significance of our hon. Friend's intervention. In anticipation of problems, charitable employers and voluntary organisations that employ people under arrangements that leave in doubt those employees' status as volunteers under the Bill might dispense with their services and immediately make the provision of service to the community less effective.

4.45 pm

The amendments propose a crude means of dealing with the problem. They highlight the fact that we are discussing not conventional full-time workers but people who work at charitable or voluntary organisations for a day or a few hours each week for nominal sums or for honoraria. We foresaw the objection, which has been made throughout the passage of the Bill, that the state, through the benefits system, should not have to pick up the tab for low wages or low remuneration. We agree, which is why amendment (a) deals with people who are not in receipt of any state benefits". The hon. Member for Eastleigh referred to people in their late fifties or early sixties who have retired early from professional careers. Many of my constituents are such people, and we had them in mind when we tabled the amendment. They may have considerable skills to offer to a voluntary organisation. Although they may be prepared to give of their time generously, they may be unable to do so without being paid.

Amendments (a) and (b) refer to mileage allowances. I should like the Minister to deal with the specific matter of volunteer hospital car drivers, which has been drawn to my attention. The new clause states that expenses may be paid to a volunteer, provided they are "actually incurred" or reasonably expected to be incurred, but what would happen if different volunteers who drove different sizes of car in different circumstances were paid a fixed mileage allowance that did not reimburse direct costs, but compensated for fixed costs that were not incurred as a result of their voluntary activities?

A significant number of people, many of whom are pensioners, undertake voluntary activities such as car driving for a hospital. That useful and worthwhile community service allows them to continue to run a motor car, which they might not otherwise be able to afford to do on a pension. There is nothing unworthy about such a mixed motive, but the failure to recognise it has been at the heart of the disagreement between Conservative and Labour Members. If the legislation referred to the methods used by the Inland Revenue in deciding whether an amount is part of remuneration, we would not have had to raise the issue. The legislation does not refer to symmetry of treatment in terms of minimum wage calculations and Inland Revenue calculations. When we said in Committee that it might have been better and simpler for the Bill to provide such symmetry, the Minister rejected that notion.

Amendment (a) seeks to include in the Bill the concept of the Inland Revenue's fixed profit car scheme. That scheme will be familiar to hon. Members, because many of them are in it.

Mr. Syms

Those of us who represent rural counties such as Dorset are aware of the tremendous benefits that are conferred by hospital voluntary car drivers. Any suggestion that such services might be imperilled by the Bill must be squashed.

Mr. Hammond

I agree with my hon. Friend. My constituency is not as rural as his, but I understand that my local hospital has 80 volunteer car drivers, all of whom are paid a flat per-mile rate regardless of the size of their vehicles. As there is a single rate for all drivers regardless of the expenses they incur, there must be an element that is considered as remuneration and not reimbursement of expenses, and that would deprive those people of exemption from the legislation. As my hon. Friend suggests, the effect would be catastrophic.

Perhaps the Minister and even local enforcement officers would turn a blind eye to such cases. However, it cannot be a good principle to draft legislation in the hope that it will work because those who are charged with its enforcement will ignore its provisions if that seems sensible.

Mr. Lansley

I am not entirely clear, and perhaps my hon. Friend or the Minister will elucidate. The new clause seeks to exclude people from the national minimum wage, but there seems to be no mechanism for making a declaration or for determining whether a person is excluded. People may assume that they meet the criteria for not qualifying but suddenly find, for reasons that they do not understand, that they are qualified but that no records have been kept.

Mr. Hammond

My hon. Friend raises an important point. An employer would face many perils in such a situation. He may find that he has fallen foul of the Bill's specific record-keeping requirements, and the penalties for failing to keep records are severe. An employer who is in doubt about the status of payments to a worker has no mechanism for seeking a definitive clarification, and would not be able to rest easy.

I think that it was my hon. Friend the Member for Daventry who said that an arrangement that worked in practice between an employer—I use the word "employer" in the Bill's terms—and a voluntary worker might rumble on for years unexceptionally. However, as the result of a disagreement, the voluntary worker might present his employer with a statement to the effect that he had been reimbursed beyond the amount of his expenses and lay a claim on that employer to be paid at the minimum wage rate for all the hours that he had worked since the start of employment. No doubt the Minister will correct me if I am wrong, but that is my understanding.

Retrospectively, if it were established that a payment that had been made to meet expenses which turned out not to be expenses as defined by the Bill, the worker would have a claim against the employer. That is an onerous situation for a voluntary organisation.

Mr. Bercow

My hon. Friend makes an important point. Does he agree that one possible way out of the serious dilemma would be to indemnify charities and other organisations in advance?

Mr. Hammond

My hon. Friend builds upon the suggestion by hon. Friend the Member for South Cambridgeshire (Mr. Lansley), that perhaps there should be some system of certification in advance so that the charitable organisation and the worker in question would be clear about their status and about whether there was any risk. By accepting subsection (2) of amendment (a), the Minister would deal with that issue once and for all by accepting the methodology of the fixed profit car scheme and agreeing that a fixed mileage payment that fell within the limits that are prescribed by the Inland Revenue would be discounted.

My understanding is that, if any part of any payment to a voluntary worker was deemed not to be subsistence or reimbursement of expenses—

Mr. Syms

My hon. Friend asked whether an employer might face a claim for back minimum wages because there had not been a clear contractual arrangement. Such a claim would cause the employer problems with the Inland Revenue and Customs and Excise, because tax implications would arise.

Mr. Hammond

My hon. Friend's intervention reinforces the points made by my hon. Friends the Members for South Cambridgeshire and for Buckingham (Mr. Bercow).

Mr. Bercow

My hon. Friend is coping stoically with the frequent interventions in his excellent speech. Does he agree—[interruption] Labour Members who chunter unintelligibly are not assisting the quality of the debate. Does my hon. Friend agree that the discovery of earlier non-payments in the public sector will give rise to the serious danger of public finances falling into disarray? The Chancellor will get into a frightful pickle, will he not?

Mr. Hammond

It is interesting to speculate how my local hospital trust, for example, would deal with the discovery some years down the line that a person who had worked as a volunteer for many years should have been paid the minimum wage throughout that time. I do not suggest that such a scenario will occur regularly, but people sometimes fall out, and working arrangements that are based on mutual trust may fall apart if there is a dispute or disagreement.

Mr. Lansley

Does my hon. Friend agree that difficulties may arise when bodies, including perhaps public sector bodies or voluntary organisation, substitute the work of volunteers for the work of paid employees? The Government acknowledged that possibility in their evidence to the Low Pay Commission.

The difficulty may arise not because volunteers subsequently take issue with their employers, but because their representatives—trade unions for example—may seek to challenge in the courts the use of volunteers. They may assert that they are workers for the purposes of the legislation if they are paid expenses over and above those that were incurred.

Mr. Hammond

I had not considered specifically that point, but I am sure that my hon. Friend is exactly right. Earlier, in relation to hospital car drivers, I had meant to mention precisely the point that other parties may be minded to intervene, even though the Minister and his officials are minded to turn a blind eye. For example, the local taxi firm may like to take any opportunity it can to take a swing at the hospital voluntary car service.

Mr. Lansley

My hon. Friend is being extremely generous in giving way again on this point, but it brings to mind a specific instance in my constituency. Considerable savings, measured in terms of more than £100,000, are expected to be made in the budget of Addenbrooke's hospital by reducing the use of ambulance services and increasing the use of hospital car services. The trade union that represents ambulance drivers may conclude that that is substituting volunteer work, or reimbursed volunteer work, for their work. I hesitate to think what some of the difficult consequences might be of the interplay between those two bodies.

5 pm

Mr. Hammond

I thank my hon. Friend for that intervention. We are suggesting not any sinister purpose in what the Government are doing, but that there may be unintended consequences, which could have serious unforeseen effects.

I should like to finish now—

Mr. Andy King (Rugby and Kenilworth)

Hear, hear.

Mr. Hammond

I thank the hon. Gentleman for his sedentary encouragement.

I draw attention to one additional point, again relating to my local hospital car service. On Friday, I questioned it very hard about how it operates. I asked whether it was sure that the mileage allowance is all it pays its volunteer drivers. "Yes," it said, "we pay only the mileage allowance." As I was going out of the door, someone called me back and said, "Oh, I have just remembered. At Christmas time, we send them all a £20 gift voucher." Is it Her Majesty's Government's intention to criminalise such gestures by an employer to voluntary workers? Ministers are shaking their heads, but my understanding of the new clause is that any payment to a person called or claiming to be a volunteer that was not a reimbursement of expenses incurred and not subsistence, would remove that person's exemption from the scope of the Bill, and make him liable to be paid the national minimum wage for all the hours he had been working.

Mr. Bercow

As my hon. Friend was making his point, did he hear the Minister for Small Firms, Trade and Industry say from a sedentary position, "It is a gift"? Does my hon. Friend agree that there is a danger that it might not subsequently be so interpreted in a court of law, especially if it is provided regularly and unfailingly over a period of years? Might it not be considered to be other than a gift? Is that not a serious problem with which we must deal?

Mr. Hammond

My hon. Friend makes an interesting point. I have been advised that the Inland Revenue would treat a regular Christmas gift to an employee of a substantial value as part of remuneration. [Interruption.] If the Minister of State, Department of Trade and Industry wants me to give way, I should be happy to do so.

I think that I have made the points that I wished to draw to the Minister's attention.

Mr. Syms

Is not the implication of my hon. Friend's speech that many charities will formalise their agreements with volunteers, and is there not thereby great potential not only for expense, but for upset between a charity organisation and volunteers, who may have a different idea of their role within that organisation?

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I remind the hon. Member for Poole (Mr. Syms) that his remarks should be made in the direction of the Chair.

Mr. Hammond

I thank my hon. Friend the Member for Poole for his intervention. That is one of the issues about which we are all concerned. All hon. Members have experience of working with volunteers in a voluntary organisation, because, by their nature, all political parties are voluntary organisations.

Mr. Ian McCartney

The Tories do not have many left.

Mr. Hammond

I think that we have rather more than Labour, at the last count. In passing, I take it that the Minister's legislation has not been drafted with the intention that political parties should be included within the definitions of worthwhile organisations that fall within the scope of the new clause.

We all understand the difficulties of working in a voluntary organisation, particularly at the interface between professional paid workers in that organisation and volunteers. That is always an area of some tension. If, as my hon. Friend the Member for Poole has suggested, the new clause causes charities and voluntary organisations to formalise their agreements and to seek to lay down specifically what is and is not required of each party, that may cause considerable dissent and unrest among a group of people who, by and large, have the best of motives in wanting to assist charities and the communities in which they live.

It is vital that the Government recognise those issues and deal with them. I had hoped that the hybrid motive—the halfway house between a pure volunteer and a full-time worker—would have been recognised and addressed by the Minister when he proposed his new clause and amendments for Report. Sadly, it has not. As I understand it, because of the structure of the Bill, there is no opportunity for Ministers to deal later, by means of regulation, with the issues surrounding the voluntary sector. That is why it is necessary for the Minister to address those issues now. I hope that he will not miss the opportunity to deal with those important points.

Mr. Rowe

I come to the debate without having had the benefit of serving on the Standing Committee and so as to be absolutely certain that my particular preoccupation has been met. I believe that it has been, but I seek confirmation.

For probably more years than is good for the organisation, I have been a trustee of Community Service Volunteers, which still, I think, places more full-time young volunteers in posts than any other organisation in the country. It depends entirely on young people being prepared to accept accommodation and pocket-money subsistence for what they do.

I think that hon. Members on both sides of the House understand the value of the organisation. It has, for example, made it possible for severely disabled people to live in the community: two full-time volunteers undertake to live with a severely disabled person for six months or so, allowing him to conduct a life in the community that would otherwise be entirely beyond him, as no social services department could conceivably provide that sort of 24-hour care.

Of course, the young people learn an enormous amount not only about how to look after disabled people—the disabled person, after a good deal of experience in many cases, teaches much to the young person—but about themselves. Young people who are finding it extraordinarily difficult to get back into the labour market are thus given an opportunity to explore not just one but often two or three avenues in exercising their particular gifts before they hit on the thing that they most want to do.

Plenty of young people who have previously had a life of crime, drug dependency or some other disabling condition are now training to be social workers, to help with mentally handicapped children or to go into teaching. Those young people would otherwise have been lost. That whole process has depended on the fact that they have been able to enter an organisation with a structure, and with 30 years' or more experience of the work involved, and have been able to be taken on, under contracts with local authorities or other employing authorities, for accommodation and subsistence only.

I want the Minister unequivocally to confirm that the intention and practice of the new clause is to safeguard the position of organisations such as Community Service Volunteers, whose value is beyond question. Over the years, it has found places for thousands and thousands of young people, in almost every case to the great advantage both of those young people and of those who employ them for six months or a year.

Mr. Lansley

I am grateful for this opportunity to add a little to what has been said in the debate so far. Unlike my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe), I have the benefit of having served on the Standing Committee, so I know the purposes behind the new clause. However, remembering the debates in Committee, I fear that there are some outstanding issues that have not been satisfactorily dealt with in the debate thus far, and I wonder whether the Minister would take us through them. It may be for the convenience of the House if I list them rather than talking about them at any great length.

The first is an important issue, which impacts on the points that my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) explained carefully and well. As all hon. Members will know, there is an area of activity that is neither wholly voluntary—that is, as the new clause explains, being undertaken solely for expenses or subsistence—nor being carried out by someone who regards himself as on the same or similar terms as those who expect to be paid normal remuneration, a living wage, for that employment.

That could come about for a number of reasons, which have already been explained in the debate. Retired people or others working for a voluntary organisation or charity purely for benevolent purposes rather than for payment may none the less need some small remuneration to assist them in their work. Essentially, such people are working for an honorarium.

It is clear from the Government's evidence to the Low Pay Commission that they understand the practice of paying an honorarium for certain work. I regard an honorarium as a payment that is not designed to reimburse expenses or provide for subsistence, but is a recognition of work in support of a charity or voluntary organisation. A person doing such work is a volunteer, and it could reasonably be argued that he would not be a worker, as defined in clause 52, for the purposes of the Bill.

I freely acknowledge that we debated that matter in Committee, but it is clear that, under clause 52, the contract that might give rise to the definition of someone being a worker for the purposes of the Bill could be implied rather than expressed, orally rather than in writing. We may be dealing with an oral contract of an implied character.

We then have the difficulty that an honorarium may be legally construed as arising from an oral or implied contract. Indeed, the moment the definition of "voluntary organisation" is stretched—and the new clause, for perfectly good reasons, does that to include not only charities but voluntary organisations and statutory bodies—we move into an area where significant numbers of people are paid an honorarium that is not for a volunteer activity but is clearly designed to recognise work that is done under a clear contract.

The example that comes to mind is that of someone on the board of an NHS trust or similar public body. That person clearly is giving his time for what is, in his view, not a paid position—or certainly not at the level of remuneration that would be appropriate for his skills and qualifications. Often, such a person provides hours of work, even under a contract, considerably in excess of what would be implied by the national minimum wage payment. That suggests that either he would have to be paid a greater honorarium to be a member of that board, or he would have to work fewer hours, or he would have to contract for a given number of hours and then add voluntary hours to that.

A major difficulty that arises from that, which the Government have not resolved—namely, that it will give rise—

Mr. Ian Bruce (South Dorset)

My hon. Friend is discussing a very important matter, and I am sorry that the Ministers are not listening.

Mr. Ian McCartney

On a point of order, Mr. Deputy Speaker. We have been listening to the debate for an hour and a half, during which time the hon. Gentleman has not even been in the Chamber.

Mr. Deputy Speaker

That is not a point of order for the Chair, but the hon. Member for South Dorset (Mr. Bruce) will have heard what the Minister said.

5.15 pm
Mr. Bruce

Thank you for your defence, Mr. Deputy Speaker.

In the minutes of almost every annual general meeting, including Labour party AGMs, is recorded an honorarium paid to a named accountant for a certain amount of auditing work. Obviously, it takes that person far more hours to do the necessary work than is covered by the small honorarium that he is paid. Under the Bill, will every organisation paying such an honorarium be breaking the law?

Mr. Lansley

My hon. Friend makes a very good point. I am sure that we could find many more such examples. They proliferate in the charity and voluntary sector, not least because organisations are often at pains to establish, in writing, that people have certain responsibilities, and to recognise those responsibilities. The whole purpose of an honorarium is that it is a formal recognition of work done. In those circumstances, it is highly possible that, under the Bill, that will imply a contract being established between the organisation and the person.

The new clause does not provide an opportunity for a voluntary organisation or a charity and the person who, in whatever capacity, does work for it, to make a declaration that that work is being freely done for the charitable purposes of the organisation and therefore should not qualify for the national minimum wage. There is no mechanism by which someone could disqualify himself from the national minimum wage so that he can work for a charity or voluntary organisation for less than the national minimum wage rate.

Mr. Bercow

Does my hon. Friend agree that, unless the Government deal with the issue of honoraria, one or two outcomes will inevitably follow in the case of an NHS trust? Either the trust's wage costs will rise—which would be damaging and no doubt at the expense of patient care—or the person on the board will cease to serve and will be replaced by someone who can afford to serve for nothing, a genuine voluntary worker. Would it not be an extraordinary move to deprive the board of expertise because of the Bill's silliness?

Mr. Lansley

My hon. Friend paints two scenarios, but I suspect that there is a third. It is that someone contracted to be a member of an NHS trust board will work formally for a relatively small number of hours at the national minimum wage rate, but voluntarily for a number of hours over and above that time. The Minister might think that that is an acceptable outcome, but I think that it would be a rather undesirable one.

Across the voluntary and charitable sector, many people will think that it is very tiresome if they qualify for the national minimum wage in respect of some of what they do for an organisation but are considered a volunteer in respect of other activities. They will be drawn into the panoply of national minimum wage legislation for purposes of qualification, record keeping and providing records; but that may bring the entire system into disrepute in charitable and voluntary organisations. I do not think for a moment that any of Opposition Members' suggestions would have impeded voluntary organisations in pursuing an employment policy in which they provided a national minimum wage on the same basis as any other organisation and complied fully with employment legislation.

Legislation will come into disrepute if it prevents charities and voluntary organisations from recognising that people—millions of people, as the Government's submissions to the Low Pay Commission have made it clear—who serve as volunteers have special characteristics that will occasionally have to be recognised in the national minimum wage structure.

Mr. Syms

Another issue is the status of retained firemen and lifeboat men. How will their status fall within my hon. Friend's arguments?

Mr. Lansley

My hon. Friend is testing me. As my hon. Friend the Member for Daventry (Mr. Boswell) said, the Minister will have to respond to those issues. However, to the extent that such persons are actively employed in the fire or lifeboat service, they should be paid the national minimum wage.

The Bill raises the issue whether one would qualify for the national minimum wage for the period in which one is waiting for a call but not working, but I think that you, Mr. Deputy Speaker, would say that I was out of order if I explored that issue, which is dealt with in the Bill's provisions on the definition of hours worked rather than in new clause 1, which deals with voluntary workers. Those firemen and lifeboat men clearly would qualify as workers, whereas the new clause would exclude from such a qualification those who work voluntarily for voluntary and charitable organisations.

Mr. Ian Bruce

I think that my hon. Friend has misunderstood the point made by my hon. Friend the Member for Poole (Mr. Syms), which was that some people who volunteer to work on the lifeboats are paid a call-out fee, which is bound to be below the national minimum wage. I suspect that they—like volunteer coastguards—would work for nothing rather than force lifeboat organisations to pay the minimum wage. Unless Ministers act on those issues, they will find either that they have no volunteers or that they will have to put a lot of money into those activities.

Mr. Lansley

I am grateful to my hon. Friend. Rather than delaying the debate myself by dealing with the issue, it might be simpler if I directed it to the Minister—who will perhaps reply to the issues raised by my hon. Friends the Members for Poole (Mr. Syms) and for South Dorset (Mr. Bruce). I am sure that, from their constituency knowledge in Dorset, they are especially aware of the circumstances and value of the lifeboat service.

My first point was how we will deal with honoraria—on which I made an intervention earlier. I am surprised that Ministers should have tabled new clause 1 in its present form, as it clearly does not deal satisfactorily with honoraria—on which they have consulted the Low Pay Commission but on which they have presumably not yet received an answer.

The hon. Member for Eccles (Mr. Stewart), who has left the Chamber, said that we could solve all those problems simply by using existing legislative machinery. That gives rise to the question of how he envisages such machinery working. If he was referring to the Employment Rights Act 1996—which I suspect he was—why have Ministers not referred to such current legislation in the Bill?

It always assists our debates if we can use existing statutory definitions, as we can not only read previous debates on them but see how such definitions have been interpreted in practice and tested in the courts. Moreover, would should then not have had to examine the new clause de novo. If the hon. Member for Eccles can enlighten us on how existing machinery can be used, perhaps we will be able to suggest to Ministers that they do exactly that, rather than asking the House to devise entirely new machinery.

Although it was not explicitly stated in the Standing Committee, Ministers have gone to the trouble of including in the new clause references to statutory bodies. It is interesting that they should have done so. The second limb of the new clause makes it clear that, when a charity agrees that a person should do work for charitable purposes, that work may be done for a statutory body. Presumably, the work could entail, for example, helping out with work commissioned by a parish council.

The first limb of the new clause—in subsection (1)—excludes from the Bill's provisions not only volunteers in charities and voluntary organisations and their associated fund-raising bodies but persons in statutory bodies. That means that we are effectively creating an entire class of volunteers in the public sector who will be excluded from qualifying for the national minimum wage.

I should be grateful if the Minister will take us through the train of thought—he did not deal with it in opening the debate—that led the Government to abandon the practice proposed in clause 42, which will be deleted by Government amendment No. 20. Why did Ministers feel it right to include in the new clause such a definition of statutory body so wide that it will include every statutory body established by every Act?

Mr. Hammond

In Committee, Opposition Members mentioned volunteers in the public sector—such as classroom assistants in schools and NHS volunteers. Is it not possible that what gave rise to the Minister's train of thought was no more subtle than a telephone call from No. 11 Downing street telling him that he had to include the public sector so as to ensure that there was not a consequent large increase in public expenditure as a result of that sector's not being able to use volunteer workers?

Mr. Lansley

I am grateful to my hon. Friend. As he has raised that point, I shall leave it to the Minister to tell us his precise train of thought. This is another instance in which—my hon. Friend is right—some of the points made by Opposition Members have led the Government to make the changes that they have made. Although the Minister, in response to an earlier speech, ungraciously said that that was not true, I suspect that it is.

I should like to emphasise another point, which was raised by the hon. Member for Eastleigh (Mr. Chidgey), and with which we will deal later in the debate. It is a great pity that references to training in the new clause include only training specifically designed for people performing a specific voluntary function. I shall not elaborate on the point—the hon. Gentleman has already dealt with it better than I could—but all hon. Members will know of people who undertake voluntary work in a charity or voluntary organisation primarily from altruistic motives but who think that there may be a beneficial secondary gain: work experience and training.

The training that volunteers acquire is by no means necessarily job-specific. From my visits to charity shops in and around my own constituency, I know that some people who work in them—particularly young people with learning disabilities—are acquiring, as the hon. Member for Eastleigh said, much more than job-specific skills: they are acquiring broader social and other skills that are designed to assist them in moving into paid employment in the workplace, where they should be able to attract the national minimum wage. It would be a great pity if, by passing new clause 1, we excluded such wider training, which could be very advantageous to those who are working for charitable organisations. I do not think it likely that any damage or mischief would be done if we included such training.

Let me make a fourth point to the Minister, which I do not think has been raised yet. The Minister has told us that associated fund-raising bodies will be included, and that will allow the inclusion of training enterprises associated with charities; but how far does that go? We know that some charity shops and other organisations remit all their profits to the charities that are, effectively, their sponsors and owners. In certain circumstances, however, charities—I do not criticise them for a moment—are increasingly lending their auspices to bodies that may not remit all their profits to those charities, and are not necessarily owned by them.

5.30 pm

The part of the new clause that deals with associated fund-raising bodies refers to a body the profits of which are applied wholly for the purposes of a charity", but it does not say that the body must be wholly owned by that charity, or that there may not be other subsidiary associated bodies that are not necessarily remitting all their profits to the charity. I hope that the Minister will tell us where the boundaries governing associated fund-raising bodies will lie in future, in relation not only to profit but to ownership.

My fifth and last point relates to political parties. The Minister has not responded to my hon. Friend the Member for Runnymede and Weybridge, who asked whether political parties would be treated as bodies qualifying by virtue of being voluntary organisations. If it is intended to exclude them, I think that considerable difficulties will ensue—not least, perhaps, for the Labour party. As we have discovered, Labour Members tend to employ a number of researchers and others at what would have been well below the going rate for the national minimum wage in past years, and perhaps still is. If they were required to pay all those researchers the national minimum wage, the bids that would have to be made to the Joseph Rowntree trust would be all the greater, and might embarrass Ministers all the more.

Mr. Rowe

My hon. Friend should understand—indeed, I am sure he does, as he has worked at the heart of a voluntary party organization—that too much transparency could damage democracy. When I worked for the Conservative party, party workers told us that floods of trade union officials were coming in to do by-election work, and asked us to complain bitterly that that constituted a monstrous breach of the spirit of the legislation. I remember the then chairman of the party—the late Lord Thorneycroft—saying that he had noticed with some delight how many paid agents of the Conservative party had chosen to take their annual holiday at the time of the by-election. I think that to force too much transparency on the operations of political parties is more likely to destroy than to enhance the democratic process.

Mr. Lansley

My hon. Friend tempts me to embark on a discussion of the characteristics of political parties more generally. If by "transparency" he means laying political party organisation open to the wider view of the public, I agree with him to some extent. Political parties are not designed to be agents of the state, and ought not to be such agents. If we construct a system whereby they become simply an extension of the accountability regime applying to public organisations, we shall subvert their essential function, which is not to be part of the state but to operate outside it. As I am sure my hon. Friend agrees, that does not mean for a minute that we should forgo accountability within a political party to its membership, but there may well be a distinction between accountability to membership and accountability to the state. Those who talk about transparency often mean accountability to the state.

We need to know at this stage whether the Minister intends political parties to be covered. If they are to be covered, there will clearly be an opportunity to exclude volunteers in political parties from qualifying, in the same way as those in any voluntary organisation. That is important, not least because—as my hon. Friend the Member for Faversham and Mid-Kent pointed out—employees of political parties often have to become volunteers at certain times. If an agent wishes to canvass, for instance, he must do so in his own time, because he cannot be paid for canvassing. I feel that such distinctions should be reflected in the legislation.

If for any reason political parties are excluded from the definition of "voluntary organisation" or "benevolent purposes", I think that we shall have serious problems. In many instances, those working with political parties will be treated as "workers" by virtue of the inclusive character of the provisions, and will be unable to carry out their work in a voluntary capacity. In that event, the activities of political organisations will be damaged.

The new clause is rightly designed to respond to points made in Committee, and it has done so to an extent. I was not party to the discussions between those on the Front Benches, but I fear that some difficulties remain. I have a general sense that, if this is to be done right, the process is becoming unduly complex, for two reasons. First, there is the inclusive character of the rest of the legislation, which is designed to ensure that—in all circumstances other than those that are expressly excluded—everyone qualifies for the national minimum wage. I understand why Ministers set out to do that, but it is causing difficulties in relation to charities and voluntary organisations.

Secondly, Ministers have not chosen to take thepossibly—altogether better route of allowing people to reach agreements allowing their exclusion by virtue of their own free will. That would have been much simpler than setting out tortuous definitions that prompt questions.

Mr. Ian Bruce

Will my hon. Friend give way?

Mr. Lansley

Yes, for the last time.

Mr. Bruce

Surely Labour Governments have always stood for giving people the right to negotiate their wages, and to have them negotiated by others on their behalf. Is it not scandalous that people should be told that they can no longer negotiate their wages, if they want to take less money than the Government think they do?

Mr. Lansley

Yes. It is astonishing that people wishing freely to enter into an agreement with a charity or voluntary organisation to work for less than the national minimum wage—as is perfectly possible—should be legally prevented from doing so. Such people might be forced to choose between not doing the work at all, and doing it at a cost that would significantly impair the return to the charity for its own charitable purposes. Alternatively, they might have to undertake to do the work on a voluntary basis, thus finding themselves considerably disadvantaged. Such people would have been perfectly willing to do their work in a way that would benefit themselves, the charity and its beneficiaries.

Mr. Ian McCartney

We have been debating the new clause and amendments for just over two hours, although at the outset the hon. Member for Daventry (Mr. Boswell) expressed general support for the Government's proposals, following extensive consultation between the political parties and the voluntary sector.

Let me begin by reassuring the hon. Member for Faversham and Mid-Kent (Mr. Rowe). A letter from Community Service Volunteers gives some idea of the charities' view, and of whether they believe that the Government are meeting their needs. I know of no charity that has submitted evidence to the Low Pay Commission, or has commented in the public domain, that does not support the principle of a national minimum wage. They find it wholly inappropriate for Opposition Members to take their names in vain in an attempt to undermine their support for the national minimum wage. On 5 March, CSV wrote expressing its appreciation for the discussions that it had with officials in the Department. The letter stated: We are entirely satisfied with the new amendment and particularly pleased that our full-time volunteers will be able to continue to receive accommodation, meals and a subsistence allowance. Your team were very helpful. Please pass on my thanks. I hope the rest of the Bill passes as smoothly as possible for you. That covers the entire context of this afternoon's debate.

The hon. Member for Daventry raised a number of issues. He mentioned Irish charities, and I am quite sure that he did not intend to challenge or attack them. There are hundreds of Irish charities in Britain doing very good work for the Irish community and the community in general.

Mr. Boswell

Of course I did not mean to do that. My remarks were framed metaphorically. The House may be interested to know that Northern Ireland still holds the palm as the most generous part of the United Kingdom for donations to charity.

Mr. McCartney

Indeed. I was glad to give the hon. Gentleman the opportunity to clarify what he said. I know from our discussions in public and in private that he would never intend his comments to be interpreted in that way. However, there are mischievous people within and outside Parliament in respect of comments by politicians.

The hon. Gentleman mentioned small charities. Many of us have worked with small charities. The purpose of the new clause is that small charities run exclusively by volunteers would be excluded from the provisions of the Bill, so there would be no problems in that respect.

The hon. Gentleman also said something about rates of pay. Many charities pay decent wages and provide decent conditions for their employees. They reject and resent any allegation that the minimum wage would undermine their capacity to continue their work. Most in the charitable sector are good employers and want to pass on good practice to other charities. Many of them work together to secure good employment practice. However, they also want to make a clear distinction between employees and volunteers. The new clause seeks to clarify that, and I believe that it does so effectively.

My hon. Friend the Member for Basildon (Angela Smith) spoke about the professionalism of volunteers. No one would disagree that, although volunteers give their time and effort freely, their skills and knowledge give added value to the charities concerned and the individuals that they seek to benefit. The skill, professionalism and dedication of volunteers provides added value and benefit to the activities of those who work in all parts of the charitable sector.

I hope that, in my intervention in his speech, I gave the hon. Member for Eastleigh (Mr. Chidgey) a clear indication of our position, and I hope that I do not have to add anything to my response to the points that he has raised with me publicly and privately.

The hon. Member for Runnymede and Weybridge (Mr. Hammond) raised a range of issues to which I shall come in a moment. However, I was disappointed by his churlish attitude to the group of amendments, although I understand that he was genuinely unable to come to the meeting and I apologise that I was unable to arrange a subsequent meeting with him. I recognise that he spent a great deal of time in Committee putting his case. When I address his specific amendments, I shall explain why I am somewhat disappointed by his attitude.

On the continuum of employment for unpaid volunteers, the voluntary sector made it clear to us in response to consultation that they wanted no such thing. They wanted a clear distinction between employees of charities and volunteers. That is what we have provided in the new clause, and that is why they wrote to us accepting it.

Mr. Lansley

In passing over the comments by the hon. Member for Eastleigh (Mr. Chidgey), the Minister has not adequately answered the points that he raised about training. Elsewhere in the Bill it is possible to specify a training rate of the national minimum wage. It is also possible to exclude trainees altogether. However, it does not seem possible to do what the hon. Member for Eastleigh and I were asking for—to exclude from account for workers in voluntary organisations the cost of training attributable to them.

5.45 pm
Mr. McCartney

I dealt with the matter more than adequately. If someone undergoes training in health and safety, it is generic training, but it is also specific, as training in health and safety has set principles and purposes. The reason for the training may be specific to the individual, although it may be a generic training programme. That is not a problem under the Bill, and I feel that my answer was more than adequate.

The hon. Member for South Cambridgeshire (Mr. Lansley) asked whether the Bill would challenge an honorarium. A genuine honorarium is not legally binding; it is a contribution, not a wage, and the person receiving it is not an employee. The hon. Gentleman raised honoraria in that context as a smokescreen to undermine the purposes of the new clause.

Mr. Boswell

Will the Minister give way?

Mr. McCartney

No. Opposition Members had two hours in which to put their case. I am trying to deal with the points that they raised as quickly and efficiently as possible.

Amendments (a) and (b) would turn the voluntary workers' clause into something quite different. Instead of allowing genuine volunteers not to be caught up in the Bill, it would provide an exclusion for part-time workers working for charities, voluntary associations and statutory bodies. It would blow a large hole in the Bill—as is entirely consistent with the approach of some Opposition Members.

The overall effect would be to limit the range of persons within the exclusion to those not on benefit and pensioners who work for up to 20 hours a week and to increase the weekly remuneration that they could receive to 10 times the national minimum wage—over and above reasonable day-to-day subsistence and accommodation.

Taken individually, there seems no rhyme or reason to any of the elements in amendment (a). Limiting the range of voluntary workers to those working fewer than 20 hours per week would arbitrarily entitle full-time volunteers who, according to the National Council of Voluntary Organisations, work more than 30 hours per week, to the national minimum. In our view, it is not a genuine amendment, but an attempt to catch volunteers in a way that was never intended.

Similarly, the suggestion of benefits up to a weekly amount of 10 times the hourly rate of the national minimum wage seems entirely arbitrary and to have no clear basis.

Amendments (a) and (b) also refer to the fixed-profit car scheme. The hon. Member for South Cambridgeshire said that, in almost all circumstances, we should look to using existing machinery, and that is precisely what we have done. The fixed-profit car scheme was introduced by the Conservative Government in 1990. All the issues that the hon. Member for Runnymede and Weybridge raised in respect of the scheme really relate to the Finance Bill and not the National Minimum Wage Bill.

Mr. Hammond

Will the Minister give way?

Mr. McCartney

No. I shall explain why that is the case.

The fixed-profit car scheme is a non-statutory scheme which employers, employees, volunteers or anyone else can use to calculate whether or not there is a profit element in their mileage allowance, if they get one. Only the profit element is liable to tax, so there is no tax liability if the mileage allowance is within the limits set by the Inland Revenue. The purpose of the scheme was to reduce record keeping. It has clearly been a non-contentious issue in political terms since 1990, so I see no reason for its inclusion. If the hon. Member for Runnymede and Weybridge has complaints about it, he should raise them when we debate the Finance Bill later this year.

Mr. Hammond

I accept what the Minister says about the fixed-profit car scheme. The purpose of including it is that the same mechanism should be used for determining whether any payment has been made that would exclude a worker from the exemption from the national minimum wage. The issue has nothing to do with tax. It is a separate calculation to be carried out under the Bill.

Mr. McCartney

The purpose of the proposal is to ensure clear limitations on payments. We have set out a clear way forward on that, with the approval of the charities. The hon. Gentleman raises issues concerning the fixed-profit car scheme that have been set out in Finance Acts since 1990. He has said nothing to undermine the context of the new clause. If there had been a difficulty, the charitable and voluntary sectors would have told us. The hon. Gentleman has raised spurious points that do not stand up to examination.

I should like to finish, because we have some other important issues to consider this evening. The hon. Member for South Cambridgeshire talked about political parties. They are not philanthropic. Under no circumstances will the volunteers who work for them be caught by the Bill. We are not interested in what members of the Conservative party do, but we should be interested if they published their accounts, please. That would be more interesting than publishing details about members and their voluntary efforts. I ask my hon. Friends to support the new clause and to oppose the amendments to it, if they are put to a vote.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

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