Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Tuesday 13th May 2025 Lords Chamber

For these reasons, I support the amendments. In view of the fact that employers’ contributions not only continue but have, in a retrograde manner, been increased considerably under the NIC Act, which went through this House earlier this year, and increased disproportionately, with the damage already seen to the labour market, which we continue to hear about in the Committee, and with businesses being more reluctant to employ the very people we need to employ, I suggest it is fair and proportionate that there should be a rebate, as proposed in the modest amendment from my noble friend and the more ambitious one from the noble Lord, Lord Fox.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, I support the noble Baroness, Lady Lister, and Amendment 72, and I add my thanks to the Safe Sick Pay campaign, the Health Foundation and other organisations. I heartily welcome the Labour Government’s commitment to strengthening SSP by removing the lower earnings limit and the waiting period.

A nationally representative survey conducted for the TUC found that around half of employees get their full pay as usual when sick, but that around 28% were forced to rely on SSP alone. It also found a clear class divide when it comes to who gets what: eight in 10 of higher earners—over 50 grand a year—got full pay when off ill, compared with only one-third of lower earners.

The Covid pandemic exposed just how precarious life is for those in insecure, low-paid work, and we do not know how many preventable illnesses were caused by people struggling into work and spreading the virus because they could not afford to stay home. But we do know, as we have heard, that forcing people back to work when they are ill is bad for workers and bad for business, puts pressure on the NHS and is costly for the economy.

I am very grateful to the Minister for taking time to meet me and the noble Baroness, Lady Lister, to discuss our concern that the formula adopted by the Government could leave low-paid workers who earn just above the lower earnings limit worse off. The DWP’s answer has been that abolition of the waiting days before a worker receives SSP ensures that, for the first three weeks, those losses will be offset. But, surely, the policy intention of the Government’s commitment to abolish the waiting days is not to make up for losses caused by its own formula. The policy intention should be to ensure that every worker who relies on SSP is, in fact, better off, and we need to protect those on longer- term sickness who are, for example, receiving cancer treatment.

I note the Government’s concern that the formula must be designed in a way that avoids workers getting more in sick pay than they would in wages, and avoids a cliff edge. I remain unconvinced, however, that it is beyond the wit of the DWP to come up with an approach that protects that position without penalising a group of low-paid workers.

Secondly, as we have heard, this amendment seeks a review of the rate of statutory sick pay. As the Resolution Foundation has pointed out, unlike many other European countries, the rate is not linked to earnings. Currently at £118.75, SSP equates to 27% of the national minimum wage. In 1999, SSP was equivalent to 43% of the national minimum wage. That is a big drop. For a decade and more, SSP has failed to keep up with the cost of living or increases in the living wage.

The Work and Pensions Select Committee has confirmed that the SSP rate is not enough to live on. At the Covid public inquiry hearing in December 2023, Matt Hancock was quizzed by Sam Jacobs, who is counsel for the TUC. The former Health Secretary agreed that the rate of SSP should be higher. How could he argue otherwise, when the UK languished at the bottom of the OECD league for statutory sick pay under the previous Government and when we know that such a low rate of SSP is a danger to public health?

I understand that perfection must not be the enemy of the good, but an SSP rate that works out at around £3 per hour is some way short of either perfection or good. This amendment implicitly recognises that this woeful legacy of neglect in tackling it will not be remedied overnight. It would, however, be welcome if the Minister could reassure us today that both the formula and the rate of statutory sick pay will be reviewed before the Autumn Budget, and rightly so.

[Baroness Cash (Con)]

My Lords, I start by declaring interests. I am an employer, the founder of a listed business, MindGym, which is a behavioural science business, and an expert in corporate training to improve employee well-being and productivity. I am also a commissioner at the EHRC.

I support the Opposition’s amendments in this group: Amendments 71A, 71B, 73, 74A, 74B, and 74C. At the outset, I would like to note for the record that everyone here is driven by compassion for those who need protection. I pay tribute to the speeches by noble Lords from the Benches opposite, but I am very concerned about these proposals by the Government.

I am grateful to the noble Baroness, Lady O’Grady, for drawing our attention to the Resolution Foundation report, which has identified some of the points that support the amendments from this side of the Committee. I will return to those.

The Government have said on record that they want growth. We support that goal. They want businesses to succeed. We support that goal. They have also said on the record that they want to reduce the number of people who are out of the workforce on long-term sickness—currently running at 2.8 million. We support that goal. What we do not understand is how on earth the Government believe that this legislation and these proposals are going to achieve any of that. They are based in compassion, I have no doubt, but the Government are pursuing a culture of incapacity and dependency that will impede the stated aims.