Statutory Sick Pay

Debate between Imran Hussain and John Milne

Tuesday 22nd April 2025 Westminster Hall

[Imran Hussain]

As ever, my hon. Friend makes an important and pertinent point. If he bears with me, I will address that later in my contribution. It is actually one of two points I want to address.

Hon. Members will know that I tabled two amendments to the Employment Rights Bill to strengthen its provisions on statutory sick pay. The first sought to bring statutory sick pay into line with the national living wage, so that no full-time worker is forced to live in poverty while unwell. The second amendment aimed to guarantee that no worker would be worse off under the new system, regardless of their earnings—my hon. Friend the Member for Leeds East (Richard Burgon) made reference to that, and I will come on to it.

First, I turn to the rate of statutory sick pay. For far too long, our statutory sick pay system has been one of inadequacy, and it has failed workers when they are at their most vulnerable. The pandemic laid bare just how broken the system is. Over a third of workers rely on statutory sick pay, and at a rate of £118.75 a week it is nothing more than a cruel joke—a poverty wage that leaves workers in financial insecurity, instead of being able to rest, recover and take the time they need to return to work fully fit.

The current rate makes up a mere 16.5% of the average weekly wage in the UK, far behind our European counterparts. To name some, workers in Iceland, Norway and Luxembourg are entitled to up to 100% of their pay during sick leave. However, we do not trail far behind only our international counterparts. When statutory sick pay was introduced in the 1980s, it was equivalent to 35% of the average weekly wage—double what workers can expect today. No other financial responsibility in a worker’s life is ever slashed by 83%. When someone falls ill, their bills, their council tax, their electricity bill, their mortgage payments and their grocery bills do not suddenly go down. That poses the question: why does statutory sick pay remain such a paltry sum, forcing people to choose between their health and their financial survival?

We know that the current rate pushes too many workers into the workplace when they are simply not well enough. It entrenches presenteeism, harming public health, reducing productivity and contributing to longer-term sickness and burnout, which makes workers drop out of the workforce entirely. The clear consensus is that the rate of statutory sick pay must increase, and it must increase in line with the national living wage.

That call is echoed by unions such as Unite and Unison, and by organisations such as the Child Poverty Action Group, Scope, Mind and Disability Rights UK. It is also supported by the majority of the British public. I urge the Minister not to ignore the swell of public opinion or the needs of workers across the UK, and to share the next steps that the Government are taking to fairly recompense workers during periods of illness.

The rate of statutory sick pay is not the only change that is urgently needed. Despite the Government’s best efforts, those on the lowest incomes, who do the hard and vital work in our economy, will be financially penalised for falling ill. These are the workers who are the backbone of our economy: cleaners, carers, drivers and retail workers. They are the very people who can least afford it. Low-paid workers—disproportionately women, young people and disabled workers—will still face the hardest burden.

The reality is that the new 80% earnings replacement rate extends sick pay to those who were previously excluded, which is very welcome, but it risks creating a system where some workers are worse off. I have worked with the Minister for many years, and I am sure that this was not the Government’s intention. But under the new rules, the reality remains that more than 300,000 workers earning between £123 and £146 a week could see their sick pay cut, which is something that my hon. Friend the Member for Leeds East referred to.

While previously a worker earning £123 a week was entitled to an earnings replacement of 95%, which is comparable to statutory maternity leave, for example, now a worker earning £124 for three days’ work a week will receive 80% from the first day of illness—£99.22 a week. Under the old rules they would have been entitled to the flat rate of £118.75 from the fourth day of illness. Under the new rules they will be worse off after five weeks. The fact that it takes five weeks to become worse off should not be seen as a mitigating factor, because this is not just about numbers.

The new rules will directly affect workers with chronic illnesses, those recovering from serious surgery and those undergoing cancer treatment. In short, it affects the people who can least afford to take a financial hit at the most vulnerable time of their life. These are workers who rely on every penny that they earn, and they must not be left behind under the new rules. That is the bare minimum that working people should expect.

I ask the Minister to outline how the Government will be supporting workers with chronic illnesses who fall sick, especially those who currently work and rely on disability benefits such as the personal independence payment to be able to dress, wash and get out and about in their daily lives. These workers have been left terrified by the recent announcement of changes to PIP eligibility criteria, and now they could also see statutory sick pay reduced, if they find themselves in that situation.

I urge the Government to think again about making the most vulnerable in our society pay for economic instability that is not of their making. It is not just an economic issue but a moral one. We can and must go further to support workers during their most vulnerable times.

[John Milne (Horsham) (LD)]

In my Horsham constituency office, I employ a member of staff who has ME. Fortunately, we can be very flexible with their working hours. However, under current law—where statutory sick pay is based on days worked not hours worked—an ME sufferer could easily miss out altogether on sick pay. Does the hon. Member agree that the Government should legislate to ensure that all employees are granted fair access to sick pay?

[Imran Hussain]

Absolutely—that is the crux. As I said before, I acknowledge that the Government have gone a considerable way. The Employment Rights Bill will make significant changes that allow millions of people to benefit from statutory sick pay when they would not have before. But the journey must not end there. The hon. Member is absolutely right that there are many people who are still missing out—there are 300,000 people who will significantly miss out, as I said.

This is not just an economic issue, and it should not be viewed as one. It is a moral issue. The Government have the power to ensure that every worker—whether in an office, a hospital, a factory or on the frontline—can take the time they need to recover without fear of financial ruin. They also have the power to ensure that no worker, especially those with long-term illnesses, receives less under the new rules than they would have received before. Let me be clear: we cannot allow this opportunity to pass without ensuring that every worker benefits from the changes we have introduced. This is our chance to build a fairer society that treats working people with the dignity and respect they deserve.

I hope the Minister, for whom I have much respect and regard, understands that I come at this from a place of support. He has a long track record of understanding these issues, and this is our opportunity. We must go further, because that is the only way we will address this matter, so I urge him to do so. Will he commit to reviewing SSP so that workers no longer have to rely on poverty pay when they are sick? Will he today commit to reviewing the impact of the new changes, specifically in relation to the 300,000 people who will be worse off under the new 80% replacement rate?

On the second question in particular, I urge the Minister to provide information to allow the House to see the impact on those 300,000 people. I do not believe for one minute that the Government intend to make them worse off; but, equally, I do not think we can just ignore it.

Finally, will the Minister outline exactly what steps he is taking to make sure that those with the most severe illnesses, and those who find themselves sick or in recovery for longer than five weeks, do not find themselves unfairly punished? The Minister knows that if we fail here, we will fail an entire generation of workers.