HC Deb 04 November 1999 vol 337 cc460-1
1. Mr. Desmond Swayne (New Forest, West)

When he plans to respond to the consultation document, "Regulation of the Private Recruitment Industry". [95822]

The Minister for Competitiveness (Mr. Alan Johnson)

We will respond once we have fully considered all the representations received.

Mr. Swayne

The Department's regulatory impact assessment gives little indication of the compliance cost of the proposals, because the Department says that it cannot calculate the extent to which behaviour will change as a result of them. Behaviour will change because elderly and vulnerable people will be unable to afford the cost of care in the home. The VAT element of the proposals alone will add £1 an hour to that cost. What is the benefit to public policy of charging that to elderly people in order to raise £40 billion a year for the Chancellor's burgeoning general election war chest?

Mr. Johnson

The consultation documents that we published in May have been well received by everyone involved with the employment agency business, for instance, those concerned with health care, such as Age Concern and the United Kingdom Association of Home Care Workers. The review is designed to promote labour market flexibility and protect elderly and infirm people where there is ambiguity about whether their carer works for the agency or for the hirer.

We shall not be awarding any Dan Dare badges to the hon. Gentleman for pointing out that there are VAT implications. That was stated clearly in our document and we are working closely with the Treasury to resolve those problems during the consultation period.

Dr. Vincent Cable (Twickenham)

Would the Minister acknowledge that he has received some strong negative representations about the proposals' impact as they relate to temp-to-perm fees? Does he agree that, if this regulation goes through in its current form, it could do serious damage to people who wish to enter the labour force on a flexible basis, particularly women returning to work and people from disadvantaged groups? Will he give a categorical assurance that, once the regulation is published, he will have a further round of consultation with those most likely to be affected by it?

Mr. Johnson

We pointed out clearly that we do not seek to end the practice of temp-to-perm; we seek to end the situation where an individual who works for a company is prevented from being hired as a permanent employee by arrangements that have been condemned by many in the industry. We seek to end restrictive practices among employment agencies, and that has been widely welcomed.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

I welcome the Minister to his first Question Time and congratulate him on his appointment. Does he realise that the proposal to introduce restrictive regulations on temp-to-perm fees charged by employment agencies, and the proposal to charge VAT on all a temporary workers' wages rather than just the agency fee element, are hugely damaging, bureaucratic and interfering? Is not that yet another example of the Government saying one thing to business about lightening the burden of regulation, but doing the opposite and introducing huge swathes of new, burdensome regulation on British business?

Mr. Johnson

I thank the hon. Gentleman for welcoming me to the Dispatch Box. He has got this matter wrong. Age Concern has made the position absolutely clear in its submission, which stated: Many of the proposed changes are entirely consistent with the broader thrust of Government policy: enhancing the protection of vulnerable people; improving the quality of services; and ensuring minimum standards in employment practice. Age Concern…wholeheartedly supports these changes. The simple truth is that if we did not change the regulations that have been in place for 26 years, we would leave the most vulnerable people—the elderly and infirm—in a position where, as Age Concern recognises, they would be responsible not just for employment law but for tax law and the health and safety of the people caring for them. That is why the changes are necessary and why we intend to carry them through.