My Lords, I am sure that the Committee’s affairs will not be too protracted today, as we clearly have a consensus from the House that the Bill is a pretty good thing. As the Minister already knows, it is the Opposition’s view that in general terms the Bill pursues a good policy and is vastly superior to the sad instrument that was relied on for the first three years of this Administration with regard to the holiday on national insurance contributions—which of course failed dismally in both its reach and its general effectiveness, with every conceivable expectation that the Government expressed before that Bill became law being disavowed by the process over the following three years. We are now in the business of recognising that the principle behind the Bill is far superior and is a position that we broadly endorse. However, it is incumbent on us to ensure that the policy works effectively and that the Bill that is the basis of that policy is fit for purpose in every respect.
The amendment would require the Government to carry out and publish a post-implementation review of the employment allowance, including HMRC’s assessment of its impact on jobs and wage levels, the overall take-up, the geographical spread of businesses that take it up and the effectiveness of HMRC’s strategy to promote it. I emphasise all these points because on every single one of them the previous policy instrument on NICs failed conclusively, and it is important that
all those targets are effectively hit. That is why, although I am not underestimating the difficulties of these demands in some areas, we want to see an assessment, as far as the Government are able to provide one, of job and wage levels as a result of the measure.
We certainly want to be reassured on the overall take-up and the geographical spread of businesses taking it up. The previous Bill had a geographical element to it, which we the Opposition never understood —but we did not have to understand it because the Bill had such a limited impact for good anywhere that those who were left out had missed very little indeed. For obvious reasons, as the Minister will appreciate, we are concerned about significant regional disparities in the employment figures, particularly with regard to young people. That is why we want this review to cover a geographical dimension.
That also brings us on to the extent to which the Government will be successful in promoting the measure. After all, a great deal of the expectation is that the beneficiaries will be small and medium-sized enterprises. The medium-sized ones probably do an effective job in keeping up to date and four-square with government initiatives, and we know that the large corporations monitor the Government so effectively that not infrequently—we will come to this later—they pay a great deal less tax than perhaps they ought.
Small businesses inevitably have a problem with legislation. Part of the difficulty with the previous legislation was the conspicuous failure to promote the concept widely enough for take-up to be at the level for which people—certainly Ministers—had hoped. We want to see that rectified as far as this measure is concerned. The amendment, therefore, establishes the necessity for a report that would guarantee a review to provide early indications of the success or otherwise of the policy. We might, as a result, see the Government learning from difficulties that may be developing.
It took a long time for the penny to drop last time. I recall that it was three years before the previous amendment to the legislation on national insurance contributions was finally written off as being unsuccessful, which shows how slow the Government can be, and how blunt their antennae, in picking up the responses of people who are meant to benefit from the legislation. We want this review, therefore, to oblige the Government to face up to these questions—and to do so early.
The amendment we are proposing follows a clause which was retabled on Report in the Commons. We are retabling it in the Lords because of the difficulties of the earlier legislation; we cannot emphasise too strongly how much we want this to be successful. We note what the Government outlined in the Commons the complexity of some of these issues, but we think it is worth trying to measure the impact of this measure on employment and wages. It seems sensible at least to consider the relationship between the employment allowance and job and wage levels. The Minister will recognise that we have seen the benefit of some of the responses in the other place to this major proposition, but I hope that he has had time to reflect, that his officials have appreciated the anxieties that were expressed
in the other House, and that today we will get from him a more constructive response than we obtained elsewhere. I beg to move.