National Insurance Contributions Bill

Lord Davies of Oldham Excerpts

Monday 28th February 2011 Grand Committee

Debate on whether Clause 1 should stand part of the Bill.

[Lord Davies of Oldham]

My Lords, presumably the Minister hopes that the Committee stage of this Bill will not be as protracted as another Bill that has been before the House over the past few weeks, and I think that I can give him that assurance. However, we want to debate whether Clause 1 should stand part for the obvious reason that this is by far the most significant clause in what is an important Bill.

As the Minister will appreciate, we support the increase in national insurance contributions but our proposals were very different. He must recognise that, during the course of the detailed discussion on the clauses of the Bill that we will have this afternoon, we will identify some of those points of difference. We hope that he will be in a position to answer some of the questions that were adumbrated in general terms at Second Reading and will be dealt with in rather more detail today.

To put the Bill in context, there is a difference in perspective between the Government’s strategy and the one that my party would pursue. The Minister and the Committee will recognise that last year there were three consecutive quarters of growth followed by a quarter of negative growth, which looked marginal when the first set of figures came out but rather more serious following the subsequent revision. We are concerned about the impact of the Bill and of the Government’s general strategy on the broader economy.

We would put jobs and growth first. That is why we are concerned that the increase in national insurance contributions will prove to be difficult for growth and particularly for the protection of employment, given that the increase in NICs is being supplemented by a very significant increase in VAT. Expert opinion identifies that the increase in VAT could result in the loss of three times as many jobs as might be lost by anything to do with national insurance increases, which were the subject of considerable debate at the last general election.

We are concerned that there is no protection for those earning less than £20,000 per year. We would have sought that protection by raising the primary threshold. The Government are imposing increases without fully increasing the secondary threshold for employers. That presents obvious difficulties. Can the Minister confirm that employers will suffer nearly £1.5 billion extra in terms of commitment of resources as against rather modest savings on the secondary threshold? The Minister will say that the secondary threshold is not meant to compensate for the impact on employers because personal tax allowances will help to some degree. The trouble with that argument, which the Minister vouchsafed to the House at Second Reading, is that it takes no account of the balance on personal tax allowances, namely the very severe benefits cuts and loss of income to many of the less well-off in our society. That is why the Bill needs to be put in that broader context.

We are concerned that the Bill is being promoted against a background of government policies that threaten the recovery. We had some indication of the difficulties just before Christmas. That coincided with adverse weather conditions, which was the reason given by the Chancellor of the Exchequer at the time and looks pretty threadbare now. One cause of anxiety about the recovery is the cuts in public expenditure, which will lead to significant job losses and a severe loss in confidence among employers and consumers. The Government propose—something that they criticised the previous Administration for—to increase national insurance contributions, but they have also increased VAT and have other strategies on the economy that are the source of great anxiety.

We look at the Bill in the context of the importance of growth in the economy and strengthening employment. Declining employment, when people lose their jobs, reduces demand severely in the economy and does enormous damage to the Government’s receipts from their various forms of revenue gathering. That is why we shall be using this Committee session for detailed examination of the Bill. However, we wanted to make this series of comments on whether Clause 1 should stand part because of its significance in the Government’s wider economic strategy, on which this side has very serious doubts. I hope that the Minister will be able to give some response. I beg to move.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, I am grateful to the noble Lord, Lord Davies of Oldham, for confirming that the Committee might move more expeditiously through this Bill than some other recent Bills.

I think that the noble Lord said that I would understand why he opposes Clause 1 standing part of the Bill, but I could not quite work it out and I am even more confused now that he says that the Opposition support the 1 percentage point increase, which is the import of Clause 1. However, I guess that I will eventually get used to the way that the House operates on these things. If the purpose of this discussion is to put the Bill into a bit of context, I am certainly very happy to do that.

The Government face the twin challenges of dealing with the inherited deficit and getting the economy growing again. In this wider context, the Bill goes to the heart of those challenges. I have repeatedly said that the recovery is likely to be choppy, and so it is proving. It is not easy to stimulate growth while bringing the deficit under control. The case of national insurance exemplifies the dilemma and the challenge. The 1 per cent increase in national insurance produces revenue of the order of £9 billion to £10 billion, which is necessary to deal with the deficit. Although we will put 70 to 80 per cent of the weight of deficit reduction on spending, nevertheless increases in taxation will bear part of the burden. Therefore, we start by accepting some of the changes that the previous Government proposed. We do not know what they had in mind on VAT. There were strong indications from Ministers in the previous Government that had they been returned to office they might well have increased VAT.

In the context of national insurance increases, offsetting measures that go hand in hand with the Bill—although they are not in the Bill—will increase the secondary threshold by £21 a week and the primary threshold and the lower profits limit by £24 a week. This will significantly offset the rises in the Bill. The increase in income tax personal allowances and the reductions in the basic rate limit and in the national insurance upper earnings and profits limit will, as a combined package, go a substantial way towards offseting the effect of the national insurance rises. Compared with the plans that we inherited, employers will be more than £3 billion better off next year, and that figure will rise in future years. As I said, we are fully compensating for the £9 billion increase in labour taxation that the rate rise represents.

The threshold rises will mean that the burden that the Government add to labour costs will lessen, and there will be more to share between employers and employees so that both will benefit. As a result of the way in which we are doing this, some of the benefit will be switched from national insurance contributions to income tax, so the net rise in national insurance contributions payments will be compensated for by a larger fall in income tax payments. Employers will be better off in respect of employees earning up to £20,000, while employers who have staff among the highest earners will pay more in national insurance contributions.

We are agreed that the 1 percentage point increase is appropriate. Where we diverge from the analysis of the noble Lord, Lord Davies, is in seeing the proposed increase as a significant tax on jobs at a time when the recovery needs to be encouraged and bolstered. That is why we have made the offsetting increases in limits, and the increase in the income tax personal allowance. I am grateful to the noble Lord for enabling us to start our discussion by putting the Bill in a wider context, because that is important. Having explored the issue, I hope that we will now move on to the detailed points that he intends to raise.

[Lord Davies of Oldham]

My Lords, of course, I am grateful to the Minister for his general response. He referred to choppy waters, but choppy waters can be uncomfortable and people in boats can feel unwell in choppy waters. We are concerned that those waters may have sufficient movement to swamp many people. We are worried about the rate of job loss and the loss of income among many sectors of our community, which will be reflected in the overall state of the economy. Indeed, we may already have seen signs of that. The Minister is fully entitled to adopt his optimistic stance at this point but I hope that his words do not come back to haunt him given that his Administration’s proposals may lead to excessive job loss. We think that it is easy to read the signs of the very great difficulties that we shall face on the employment front and, therefore, in the economy.

The Minister will also know that there is a difference in perspective between my party and the Government. Other significant Governments in the world—not least that of the United States—take a rather different perspective on what needs to be done in policy terms in relation to the present position as compared to the policy that he has adumbrated. Nevertheless, I am grateful that the Minister has been as constructive as he always seeks to be in response to my opening remarks. As we get into closer detail on the Bill, I do not have the slightest doubt that he will enjoy being even more constructive.

Clause 1 agreed.

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Moved by

[Lord Davies of Oldham]

11: Clause 5, page 3, line 35, at end insert—
“( ) a non-trading charity”

[Lord Davies of Oldham]

My Lords, from the perspective of opposition I always rather approve of Bills starting in our House, the upper House. It gives us a first shot at the Minister and a chance to develop our own argument without in any way having been influenced or prejudiced by any discussions elsewhere. In opposition and in government I often found it quite a challenge with Bills starting in the Lords because Members come well informed, with their own perspective, and set the scene which is then followed elsewhere.

On this occasion, however, the amendment that we want to press the Minister on with regard to non-trading charities was dealt with extensively in the other place in Committee but I must say, and I hope the Minister will bear this in mind, we did not think the response of the Government on this issue was particularly convincing. It seemed to rest on why the Opposition were introducing charities to a Bill which is all to do with the wealth-creating sector. That may reflect a rather narrow perspective on what is called, and should be defined as, wealth in our society, but I will not go into too many philosophical—not to say economic—arguments on that.

What it does raise for us, however, is a very odd perspective indeed. As we understand it, the Government in their more benign moments are extolling the virtues of the big society—that we are all in it together and we can all contribute to it in our various ways. Among those various ways there is no doubt at all that there is an expectation, and indeed a hope, that what will be generated is greater activity by those who work in charitable activities, rather than other more formal wealth-creating organisations or public institutions.

The Government, of course, need this encouragement. After all, they are about significantly reducing the public sector. I know that the noble Lord will say—I am almost word perfect on these matters—that that is because of what they have inherited. There is never a suggestion that what the Government have inherited has perhaps nothing to do with the deficit of the last Government but is an inheritance of the philosophy with regard to society; namely, that big government is bad and small government, by definition, is inevitably better.

Small government means that functions are not going to be carried out for people with various needs by government, and those needs are going to be unrecognised. It is not often that Ministers present themselves entirely in that harsh light, although on occasion I must say there are notable exceptions to that kind generalisation. Ministers expect tasks to be done, not by public institutions but supported and sustained by public revenues. In other words, they want someone else to do it.

I recognise, of course, that wealth creation is of enormous significance to our society at all times, but particularly in the present economic situation. However, the idea that we should exclude the active contribution of other institutions seems to me to require a pretty substantial defence. Why so? Why should a non-trading charity not fit within this framework? Why are we not inclusive on the institutions that can contribute to the nation’s welfare and the employment of individuals? Why are the Government saying that in this respect, as far as charities are concerned, there is no room in the inn? That does not seem to be based upon any economic perspective, nor one outstandingly of cost, but upon the presumption that here we have a measure that is overwhelmingly concerned with business and the wealth-creating area.

I am very far from decrying that; I am all in favour of that which encourages new businesses to develop and flourish. However, I cannot see why one should just slam the door in the face of those developments which will contribute to the common good but are non-trading charities. If the noble Lord is just going to fall back on the stance that was presented in the other place, I can only say to him that sufficient time has elapsed to consider the responses made at that time. They were unsatisfactory on that occasion to many Members, certainly to my side of the committee considering the matter in the other place. They appear manifestly unsatisfactory to us at this stage and I hope that the Minister can give a response to these points.

[Lord Newby]

My Lords, I have a factual question to ask the Minister on this. During my life, I have been involved in setting up one or two charities where the legal basis of the charity has been a company limited by guarantee which has then got charitable status, so that we have been filling in returns to Companies House as well as to the Charity Commission. What I do not understand is: if a charity’s legal basis is corporate and that charity is then employing staff, whether trading or not, why does it not mean that it would be covered by the normal income tax and national insurance rules?

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[Lord Davies of Oldham]

I am grateful to the Minister. I was looking at Hansard and I see that the framework in which I used the word “benign” for the Government was extremely limited and confined. I think I am unlikely to use that adjective again in our debates. It was a one-off.

I appreciate that charities enjoy various advantages for the work that they do across the range of the taxation system. Here is an opportunity which the Government seek to encourage. Of course, I recognise the prime purpose of what they define as the wealth-creating sector but surely the Minister should appreciate how limited the opportunities are for legislation. Certainly, as a Treasury Minister, he will know that although the Treasury is in an advantageous position compared to other departments, when it can identify available resources—the Minister shakes his head and is engaging my sympathy at this stage, but I will not use the word “benign” again—it is not replete with opportunities to legislate any more than any other department. With its Bills, it is in some degree of competition.

Here is a very modest little Bill with a clear objective. I do not decry the clear objective, the main purpose, of the Bill. I am merely saying that within the framework of that main purpose, not a great deal is necessary to provide some opportunity for non-trading charities. I merely say that it is recognised on all sides that charities always have an important role to play, but this Government are placing increasing emphasis on the third sector in those terms. Therefore, it ill behoves them to take a negative view on what they can do to help within the framework of this modest little Bill.

Of course I shall withdraw my amendment today, but I am by no means certain that we have seen the last of this issue.

Amendment 11 withdrawn.

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Moved by

[Lord Davies of Oldham]

12: Clause 6, page 3, line 43, leave out “10” and insert “5”

[Lord Davies of Oldham]

The Minister will be somewhat shocked by the fact that I am being constructive at this juncture. We have a later amendment that asks the Minister to address himself to a modest change to the Bill, which he might define as an extra demand on resources, so I am being constructive with this amendment. Given the fact that we know that the vast majority of new businesses in their first year employ not many more than two persons, I think that the Government may be excessive in their proposition of 10. I suggest five against a background where the Minister will already have sniffed the air and decided that there must be an ulterior purpose. Indeed there is. As he knows, with the later amendment I want to talk about apprenticeships and to extend the definition a little more.

We think that the vast majority of new businesses will benefit from what is on offer from this measure if we restrict it to the first five employees. We have tabled the amendment to see whether the Minister agrees with us.

[Lord Newby]

It is a pity that Amendment 14 is not grouped with these two amendments as they clearly fall together. While everybody supports promoting apprenticeships, it seems to me that the Bill is simpler than what the noble Lord proposes. While it is a good thing to promote apprenticeships, if I am starting up a new business and am not necessarily going to employ apprentices, I could envisage a situation in which I might well employ 10 people. I raise this while declaring an interest. I formed a community interest company a year ago, which will start trading in this coming financial year. It is likely to be based in Birmingham. I do not know whether the company will qualify for this measure, given it was formed but not trading last year, but we will be employing both part-time and full-time people in the area of education and sport. It may well be, if we are successful, that we will be employing more than 10 people within three years. If some of those are coaches or if some of them are already qualified as teachers, they will have skills. They will be working for us where they would not otherwise be working in an area covered by the Bill, but technically they will not be apprentices.

I think that you would lose the opportunity to encourage companies which are employing people who would not be eligible for apprenticeships by reducing the limit down from 10 to five. Of course, if the limit stays at 10, Amendment 14 has virtually no impact because the number would go up only from 10 to 12. Therefore, partly in a self-interested sense—I have no idea whether our company would qualify and this is not the reason that I am doing it—it seems to me that you may damage employment prospects by these amendments in a way that is not really intended.

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[Lord Davies of Oldham]

My Lords, I will certainly withdraw the amendment, although I am not sure that I entirely accept the arguments made against an amendment that I have not yet even moved. I am afraid that the Committee will have to endure that burden in a moment when I come to apprenticeships. I accept the Minister's point that the number of new employees is likely to be very limited, despite what the noble Lord, Lord Newby, said about his ambitious proposal. I wish him well in personal terms while preserving strict neutrality towards the Bill.

The number of new companies will not be as extensive as he indicated. The Minister is right to call in aid that point, and to refer to the limited savings represented by the amendment. I hope that it will be accepted in the spirit in which it was intended, namely as preparatory to the marginal addition to the Bill contained in the next amendment. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

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Moved by

[Lord Davies of Oldham]

14: Clause 6, page 3, line 45, at end insert—
“( ) A new business which offers apprenticeship opportunities which are taken up during the period of the holiday period shall be allowed to extend the number of qualifying employees to 12.”

[Lord Davies of Oldham]

My Lords, apprenticeships are a good thing. I know that I will get nods from all sides of the Committee when I say that. We have made progress in recent years and it is important that we make greater progress. One dimension that ought to worry us all is unemployment. It is a potentially greater problem across wide ranges of our society but unemployment visited on young people is a particularly pernicious burden. We should not be surprised if we have difficulties with the attitudes of young people to our society if it is impossible for them, whatever their talents, to land a job. Apprenticeships are an important way in which people can come within the framework of work, and I suggest that our modern society will reflect rather more the significance of old-style apprenticeships.

When I say “old-style”, I refer to our great and glorious industrial past. A predecessor of mine in Oldham used to boast of there being 20,000 engineering employees in plants in the Manchester and Oldham area, and of hundreds of apprenticeships being available. Young people streamed out of education—in some cases, they might have been better advised to stay on to earn different qualifications—into guaranteed opportunities as apprentices in those big engineering works. Those days are long past; we all appreciate that. However, what may be becoming more significant in our society is the development of skills and crafts that mirror a period prior to the great industrialisation. I refer to small-scale businesses and crafts that often do not need many full-time employees to justify an apprentice who in his or her turn learns their role. That is of very great importance.

In all my time when I was greatly involved in further education, one thing that drove me to distraction was our inability to sell work experience in relation to the education experience in college. This was particularly true for young women. There might be a course leading to a career with the cleanest, most attractive technology imaginable—for example, providing the electronic back-up for pop groups, which should lighten up the heart of every youngster—but one would see engaging in those activities exactly the same proportions of men to women and boys to girls as we had in our traditional pattern in the world of work. We have to move away from that.

Apprenticeships, particularly those in small companies relating to the operations that we are defining in the Bill as worthy of support, potentially provide opportunities to break the mould of some dated employment practices. The Minister will tell me that this is a limited Bill and that the gains that will come from it are necessarily limited when viewed against the broader perspective of the Government’s policies. I recognise that all too clearly but the Bill nevertheless seeks to help a particular sector of small businesses. We should surely try to link that to the importance of developing apprenticeships in our society and, accordingly, I beg to move.

[Lord Sassoon]

My Lords, apprenticeships are certainly important to this Government. Since the noble Lord, Lord Davies, has talked about them at some length, as he may know, it was National Apprenticeship Week three weeks ago. I met electronic engineering apprentices working on the rebuilding of Blackfriars station and its railway bridge. It was enormously encouraging to see the enthusiasm of those apprentices, who fully understood how their apprenticeships could be the start of a very worthwhile and remunerative career path and that they had a very supportive employer—a much bigger employer than in the scheme we are discussing. However, when I asked them whether their south London schools had encouraged them down this path, it was depressing to be told that there had been absolutely no mention of apprenticeships as a route to go down on the part of those schools. Therefore, I can see that there is work to be done on fully encouraging young people to take up apprenticeships, but it will not be for lack of government money. In 2011-12, we will provide £799 million for apprenticeships in the 16 to 19 age range, which is an increase from the £780 million in 2010-11. This money will fund 230,000 apprenticeship places for that age group. Therefore, the importance of apprenticeships is absolutely not lost on me.

Apprentices and their national insurance are covered by the Bill in the same way as any other employee. On previous amendments we have talked about the number of employees that small businesses typically take on. That is a critical point. The ceiling that we have left in the Bill of 10 employees provides sufficient headroom to take on apprentices. A feature of apprentices is that there is not normally the turnover that we talked about and it is not a question of part-time work. One or two apprentices being taken on by a business should be accommodated within that headroom limit of 10. We think that is a sufficient and appropriate way to accommodate what I completely agree is a critical part of the thrust needed to rebuild the nation’s workforce with the appropriate skills base for a thriving economy in the 21st century. With that explanation, I again ask that the noble Lord follow the convention of withdrawing his amendment.

[Lord Davies of Oldham]

My Lords, I am grateful to the Minister for that concerted response and, of course, I withdraw the amendment.

Amendment 14 withdrawn.

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Moved by

[Lord Davies of Oldham]

16: Clause 8, page 5, line 32, at end insert—
“( ) HMRC will ensure that all staff dedicated to the administration of deductions or refunds under the terms of Part 2 of this Act are additional employees and not taken from other tasks necessary for the continuation of the other functions of HMRC.”

[Lord Davies of Oldham]

My Lords, I have no doubt that Amendment 16 may cause a slight flurry in the dovecotes. I hope that the Administration recognise that we are seeking to guarantee the success of the scheme by offering protection for the administrative resources devoted to it. However, I also see significant figures in the Treasury, not least the Minister himself, looking somewhat askance at the fact that we might have in public statute a definition of who should do the job of the Inland Revenue with regard to this issue.

This is a probing amendment and I do not expect the Minister to accept it on this occasion, although in due course he may be persuaded. The intention is to identify one obvious factor. We fully recognise that the public service is under considerable challenge at present, that lots of posts will be lost and that an awful lot of people are under pressure. Yet this scheme not only requires additional resources but has particular complexity built into it. There is no doubt that the Bill would be regarded as a matter-of-course administrative exercise if it covered all regions of the country and the excepted areas were brought in. We all appreciate the complexity and difficulty of the position, and the amount of resources that will be required to ensure that the scheme works. Of course we share with the Minister the ambition that this will prove to be successful. However, there are clear administrative implications. I am sure that the Minister has thought about these very seriously and will give me all the reassurances that I could possibly want.

[Lord Sassoon]

It is a high bar to be able to give the noble Lord, Lord Davies of Oldham, all the reassurances that he could wish for, but I will attempt to give him some reassurance. The way in which HMRC is going about administering the holiday is that it has devised new processes for dealing with the holiday alongside the other day-to-day tasks in its casework. Additional steps have been incorporated already in its day-to-day caseworking, so it has not been necessary to employ new staff. The training has already been done. It shows how HMRC is able to adopt a flexible approach to allocating its resources as and when schemes in tax and national insurance change. HMRC staff have been engaged in this work since September. It would not be possible to use new employees, if that was being suggested. I understand the probing nature of this discussion but using new employees would not technically work as staff are already trained and running the scheme alongside their other responsibilities without the need to employ additional staff.

I hope that the noble Lord has the reassurances he seeks, such that he might be minded to withdraw Amendment 16, as I think he said that he would.

[Lord Davies of Oldham]

I am grateful to the noble Lord. I feel somewhat encouraged. I did not have the slightest doubt that the issue was expressed entirely in his own words and was not drafted for him by a senior official. If that had not been the case, I would have had a few doubts. I am very grateful for the response that he gave. I beg leave to withdraw the amendment.

Amendment 16 withdrawn.

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Moved by

[Lord Davies of Oldham]

17: After Clause 10, insert the following new Clause—
“Consideration of extension or modification of scheme
( ) The Treasury shall, by a date no later than six months after Royal Assent, and then again after a further 12 months, review the operation of the regional holiday scheme under Part 2 of this Act to assess if it should be reapplied to different areas of the country.
( ) If a recommendation is made to extend or modify the application of the scheme, the Secretary of State shall bring about such changes by order, to be subject to the approval of both House of Parliament.”

[Lord Davies of Oldham]

In moving Amendment 17, I shall speak also to Amendment 18. They clearly have the same thinking behind them; namely, the scheme’s advisability in circumstances where we recognise the challenge that the Bill presents. The noble Lord was good enough to indicate a moment ago the administrative arrangements that have been put in place regarding the Bill. It needs to succeed and we need to be able to identify its success. As we have indicated, we have real reservations about certain parts of the operation, particularly the concept of the exempted regions.

Therefore, we want a full evaluation of the virtues of the scheme. Amendment 17 proposes that we should get an early report from the Treasury on its operation and Amendment 18, which is linked in the discussion, proposes that there should be a full report on the impact of the scheme. The measure has its exempted regions, but it has a highly specific and particular approach to an important issue, which is bound to affect particular areas. As the exemptions have been made on a clear identification of where the economic need is for this stimulus—that is why the stimulus is partial rather than national—it is only right that we are in a position to evaluate whether that strategy proves to be successful. Amendment 18 seeks a report that will give us the fullest evaluation of a scheme that has its controversial elements as well as carrying a principle to which the Opposition also subscribe. I beg to move.

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[Lord Sassoon]

My Lords, we certainly agree that generally tax policy-making and the effects of tax measures should be more transparent. It is for that reason and because of the commitments given in another place, which I shall run through in a moment, that we do not believe that Amendment 17 is necessary. However, we completely share the commitment to transparency. Therefore, it may be helpful to the Committee if I echo the undertaking given by my honourable friend the Exchequer Secretary in another place to provide Parliament and the public with updates after the end of the tax year on the operation of the scheme, including information at regional level, although the precise requirements set out in the amendment could raise legal issues, for example on confidentiality of taxpayer data.

The factual report that we envisage would cover, regionally and nationally, the number of new businesses applying, the number of applications rejected, the number of qualifying employees for whom a holiday has been claimed and the amount claimed. The main difference between the commitment that the Government have made and this amendment is that the latter would require a constituency level breakdown even though the scheme is regional in England and will not cover every English constituency.

I remind the Committee that during proceedings in Committee in another place, amendments put forward with the aim of altering the holiday to a constituency basis were discussed at some length. My honourable friend the Exchequer Secretary said then that the Government do not believe that a constituency-based scheme is either appropriate or feasible. Since we have a regional scheme including the whole of Wales, Scotland and Northern Ireland, it does not seem logical to provide a constituency level breakdown even if it was possible to do so. A regional scheme and a regional analysis at the end of each tax year will be available for scrutiny. Therefore, we do not think that it is necessary to enshrine that in an amendment to the Bill. I refer to Amendment 18—I said Amendment 17 at one point, and will come to that in a moment.

A technical point in the amendment refers to a budget for the scheme. For the avoidance of doubt, businesses can be confident that there is no budgetary constraint. The holiday will continue as proposed, regardless of the number of applicants. The expected costs of the scheme were set out in the policy-costing documentation at the time of the Budget last year.

Amendment 17 is aimed at providing flexibility to modify the holiday. As I have explained, the Government want to target available resources on the regions most dependent on public sector employment. We want to do so in the way that we have discussed at length with regard to the qualifying businesses, the numbers of employees and so on. However, introducing flexibility to change the details of the scheme, as proposed in the amendment, would increase uncertainty for those who might potentially benefit and would risk inhibiting decision-making for those who need to know with some certainty what the holiday permits. I hope that I have provided considerable reassurance on the questions of transparency and of the ability of the House to scrutinise the way that the scheme will operate in practice, and that noble Lords will withdraw their amendment.

[Lord Davies of Oldham]

I am grateful to the Minister; half a loaf is better than none. The extent to which he defined how far he was able to go in response to the amendment was some consolation. I appreciate his remarks. I am well aware of the fact that no one in Committee is particularly concerned about constituencies. I am also well aware that the issue was raised in the other place, where concerns were extensive. The Minister will forgive me for seeking to identify that this might be the basis for a degree of transparency that would be welcomed by all those who are directly answerable to the electorate. I am grateful for his response and beg leave to withdraw the amendment.

Amendment 17 withdrawn.