Statutory Sick Pay and Protection for Workers

Kirsten Oswald Excerpts

Wednesday 18th March 2020 Commons Chamber

[Margaret Greenwood]

My hon. Friend makes a couple of important points about the levels of pay and the people who are able to access it, and I will be coming on to deal with those things in my speech.

Some 7 million people are not eligible for statutory sick pay: just under 2 million workers on low income do not qualify because they earn less than the £118 on average; and 5 million self-employed people do not qualify. Those on low pay are some of those who will be hit hardest by the crisis. Many of them work in retail, hospitality and leisure, and we are also hearing of people being laid off in these sectors. Others will be concerned that their jobs may be at risk, and these anxieties could also make them more likely to carry on working, even if they are unwell. Nearly 1 million people are on zero-hours contracts. Analysis by the TUC found that the earnings of about a third of them do not meet the threshold for SSP, compared with a figure of 6% for permanent employees, and women figure highly in the number of people on zero-hours contracts. Overall, about 70% of workers who would benefit from the removal of the threshold are women. A Government consultation published last year highlighted that workers who do not earn enough to qualify for SSP may be “working when unwell”. It said that the Government believed that there was a case to extend eligibility for SSP to people earning less than the threshold. So will they now extend SSP to all workers, including those on low pay.

Along with the just under 2 million people whose earnings are too low to qualify, others on low income in the gig economy are not eligible because they are classified as self-employed. They include careworkers, cleaners and delivery drivers, the very people on whom we will be depending to an even greater degree than usual in the coming weeks and months as people have to self-isolate in greater numbers. My hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) has rightly highlighted, in a letter to the Government signed by 100 colleagues, that although NHS England has issued guidance advising trusts to give full sick pay to staff who have to self-isolate because of the disease, careworkers on zero-hours contracts will not be protected. They make up a quarter of the social care workforce. Will the Government ensure that they also qualify for full sick pay? In the case of delivery drivers, the GMB has worked with Hermes to agree on a fund to protect the income of drivers who fall sick or who have to self-isolate, but there are other examples of companies offering derisory payments or even requiring drivers to continue to meet the costs of renting vans even while they receive sick pay. We should not need to emphasise how important it is that people in occupations where they are going from one house to another should not go on working when unwell. We depend on people such as carers and drivers, and the Government have a responsibility to protect them if they are unable to work because of the outbreak.

There is also a case to extend statutory sick pay to the self-employed more generally, as the Irish Government have done. Many people who are disabled and who have been ill, for example, choose self-employment because of the flexibility that it can give them to choose hours that are manageable. However, they also may be now more vulnerable to the virus.

The level of statutory sick pay is far too low at only £94.25 a week, so even those who do qualify for it are likely to struggle to keep on top of even basic household bills. Average weekly earnings are currently £512, meaning that the average worker who has to self-isolate for 14 days will see their income fall by more than £850 during that time.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Is the hon. Member aware that research undertaken by the Institute for the Future of Work absolutely backs up everything she is saying about putting the statutory floor in place so that people can economically contribute when it is right for them to do so? There is much more resilience in the general population and they have more ability to work when they are fit to do so when such measures are in place.

[Margaret Greenwood]

The hon. Lady makes a really excellent point, and I thank her for it. Many workers on low pay are unlikely to have savings to fall back on either. In a recent YouGov survey, 48% of workers said that they would not be able to cover their rent or mortgage and other living expenses if they had to take two weeks off work at the current statutory sick pay rates. The European Committee of Social Rights found in January 2018 that statutory sick pay and social protections for the unemployed, sick and self-employed people in the UK were “manifestly inadequate”.

A worker in the UK on the national minimum wage who has to self-isolate will receive less than a third of what they would in Germany and less than half of what they would in Sweden or the Netherlands. The level of statutory sick pay is also set lower than the national living wage, which the Government said in the Budget that they want to increase. Will the Government therefore raise statutory sick pay to at least the level of the real living wage so that people are not pushed into poverty by doing the right thing?

The Government’s approach has been to say that people on low income who are not eligible for statutory sick pay can claim universal credit or new-style ESA. That is not the answer. Universal credit acts as a vehicle for cuts and the level of support is simply too low.

The four-year benefits freeze will only come to an end in April, and, as a result, families living in poverty have been left £560 a year worse off on average, so will the Government raise the level of social security payments in order to build resilience in people facing the virus? The five-week wait for the payment of universal credit means that there will remain a risk that people will go on working when unwell. The Government say that people can request an advance, but advances are loans that have to be paid back, often on top of other debts built up during that period, so will the Government commit to ending the five-week wait, and will they change their loan into a non-repayable advance?

The truth is that people often have to rely on food banks to survive as well as on advances during the first five weeks, and often after that, as deductions are made from the universal credit when it finally does arrive. However, there are reports that panic buying by the public is leading to food banks running short. People using food banks cannot afford to stock up and so are disadvantaged still further.

The Government should be taking measures to protect people in poverty in the current situation. Will the Government immediately suspend deductions from social security for anyone who becomes ill or is forced to self-isolate, and consider suspending them for all other claimants? Will the Government suspend work search requirements for anyone directly affected by the virus, and will the Government suspend all sanctions?

In the Budget, the Chancellor also suggested that some people who become ill but do not qualify for statutory sick pay could claim new-style ESA. That is £73.10 a week, even lower than statutory sick pay. Someone who is ill as a result of the coronavirus or for any other reason should not also be pushed into poverty and left worrying about how they will cope financially, so will the Government raise the level of new-style ESA payments? Even to get that, someone has to have built a contribution record over the past two years, which people in insecure work in particular may find difficult to do.

The Government announced that they were temporarily suspending face-to-face assessments for sickness and disability benefits. That is welcome as far as it goes, and Opposition Members have been highlighting the major problems with how assessments are carried out for a long time, but the Government have said that this approach would be replaced by telephone or paper-based assessments. That could risk increasing pressure on GPs at a time when they are already overrun, so can the Government tell us clearly how assessments will be carried out during the outbreak?

Media reporting of the virus highlighted that the most at risk had underlying health conditions, so what is the Government’s response to Mind’s call for all reassessments to be suspended to give people security of income at this time? What action will the Secretary of State take to protect people who care for a loved one who was already ill or disabled before the crisis began? Neither person may be directly affected by the virus, but attending a jobcentre could leave the carer at greater risk of contracting the virus.

The truth is that social security changes aimed solely at people who are self-isolating or ill will not be enough. Other people will be affected by the crisis. The Government have said that they will suspend the minimum income floor in universal credit for self-employed people directly affected. Will they also suspend the minimum income floor for all workers, given that many will be affected as a result of the crisis and the impact on the economy?

The demands on the DWP will be considerable, and its own staff may be forced to self-isolate or take time off because of illness as a result of the outbreak. What will the Government do to ensure that the service can continue? We are calling on them to do all that they can to introduce a form of robust, generous and comprehensive income protection for those whose hours may be cut or who may be asked to take unpaid leave because of the impact of the crisis. In some cases that will be because of a fall in the number of customers, but if schools have to close at some point, there will also be parents who are not ill and do not have to self-isolate, but who are unable to go on working, at least full-time. The Danish Government have just announced a scheme that would involve their paying 75% of people’s wages in those circumstances, and businesses paying the remaining 25%. A similar scheme successfully limited redundancies in Germany during the financial crisis.

--- Later in debate ---

[Neil Gray]

We have to reflect on the fact that, even not at times of crisis, UK statutory sick pay rate is considerably lower than that of other European nations. A permanent change is required, but a temporary measure which might go beyond that permanent increase is required to deal with covid-19, so the answer is both, if that makes sense.

The Government must extend the policy further to ensure that sick pay is set at an hourly rate and available for everyone for 52 weeks instead of 28. Current rules on statutory sick pay are not flexible enough to meet real-life needs and fall far short of meeting a dignified standard of living, even with this new change. Disability groups have been especially vocal in calling for an overhaul of the sick pay system. Their concerns must be factored into the UK Government’s response to the sick pay consultation.

The UK Government should accept the TUC’s recommendations on sick pay for all. Those include abolishing the lower earnings limit, which would extend coverage to almost 2 million additional workers; permanently removing the waiting period for sick pay; increasing the weekly level of sick pay from £94 to the equivalent of a week’s pay at the real living wage; permanently agreeing that the legal requirement on fit notes after seven days of absence be extended to 14 days, with employers accepting self-certification for anything less than that; and permanently providing funds to ensure that employers can afford to pay sick pay.

The UK Government must do all they can to support businesses, to ensure that jobs are kept for the duration of this crisis. I would like to see the UK Government provide much greater grants, rather than loans, to help all businesses stay afloat, and attach conditions about ensuring that jobs are protected. We have seen that type of initiative in Denmark, and I hope the UK will follow.

Clearly, we all hope that these issues are temporary. The UK Government must do all they can to ensure that the attachment between employer and employee is not detached. That is important for workers, employers and the wider economy. Yesterday, Robert Chote, the chair of the Office for Budget Responsibility, urged the UK Government not to be “squeamish” about spending whatever it takes to prevent mass foreclosures, bankruptcies and millions of job losses as the UK effectively goes into lockdown. He said:

“When the fire is large enough you just spray the water and worry about it later.”

I turn to measures to support people who are self-employed and other business owners. The UK Government must do more. I echo the calls from my hon. Friend the Member for Glasgow Central (Alison Thewliss) last night. We must protect the incomes of people who are self-employed and do so quickly, to give them confidence. She was also right to raise issues around maternity leave, parental leave and support for people with no recourse to public funds; they are extremely vulnerable at the best of times, but right now they must be supported. The UK Government must give information to the devolved Governments as quickly as possible, and encourage much greater information sharing to allow all Governments to act swiftly and appropriately. At Prime Minister’s questions, my right hon. Friend the Member for Ross, Skye and Lochaber raised the prospect of some form of minimum income guarantee, such as a universal basic income. The Prime Minister appeared to accept the general premise, but time is now of the essence. Can the Minister give an idea of when he expects some form of announcement on people receiving financial support?

The UK Government should consider whether they will extend the normal deadlines for people to provide the necessary information to support social security applications, while paying people much more quickly as the demand is likely to be much greater. There is clearly a need to go further on social security. Ministers have heard me discuss the various issues that there are routinely with universal credit. The changes I want to universal credit, although they would undoubtedly help in this crisis, may not be practically achievable in a useful timescale—I am talking about scrapping the five-week wait, the two-child cap and increasing work allowances.

Instead, for the duration of this crisis, the UK Government need to ensure that those who are in or out of employment, those who are employed or self-employed, are paid an amount that allows them to get through. Universal credit advances, for instance, should now come in the form of a grant, not a loan. The Government should also look at urgently suspending the tax credit income disregard for reductions in earnings, at least for the 2020-21 financial year, to ensure that, where earnings fall, household tax credits entitlement takes account of that loss.

We now know that schools in Scotland and Wales are to close at the end of this week. That puts huge pressure on families who rely on free school meals, so I urge the UK Government to look at this area, as pressures are going to be on those families for the duration of the school closures.

[Kirsten Oswald]

One of the issues that constituents have contacted me about a number of times over recent days is the finance of households that rely upon prepaid meters for their energy. These households are likely to already be financially more vulnerable. It is very likely that they have to travel some distance to get the meter top-ups that they require. As part of their thinking, could the UK Government give serious thought to compelling the energy companies not to cut people off and to take account of the fact that there will be higher needs for energy and less money to go round while this is happening?

[Neil Gray]

I absolutely agree. Many calls are being made across the country today for direct payments to be made from the Government to utility companies to ensure that people in these circumstances do not miss out, but it goes back to my original premise: incomes for people, regardless of their circumstances during this period, are going to be hit, so the Government need to provide some form of minimum income guarantee to ensure that people in all circumstances are able to get through, whether that is via statutory sick pay or the social security system. If they are in work, the Government must ensure that, if people lose hours, those could be picked up again, so they continue to pay their bills and continue to live a sustainable life.

The monthly allowance for universal credit should also be increased dramatically and all other social security payment levels should be swiftly reviewed as well. Clearly now, this is not business as usual. We cannot continue to pay social security rates which impoverish in normal times, never mind now. We are going to have to accept that, to get through, the UK Government are going to need to inject a massive amount of money into the economy to make up for what is undoubtedly going to be a massive downturn across a wide range of sectors, the like of which I do not think we have ever seen before—a downturn that will result from the actions that the UK Government and other Governments are rightly taking in asking people to self-isolate and take other actions to contain the virus. We cannot tell people to stay away from work if they have symptoms, to stay away from restaurants, bars and cinemas and to work from home, and not expect an economic impact, an employment impact and an income impact. The UK Government must fill that hole to ensure that they fulfil the promises of the Prime Minister that nobody will be penalised and everyone will be protected for doing the right thing.

I wish to conclude with an encouragement to everybody who may be following this debate. Please be community-minded. We have already seen some fantastic ideas and responses to the crisis in all our communities. Watch out for your neighbours. Help if you can. Buy only what you need. If they have the means to buy more, add what you can to the food bank trolley and know that others certainly do not have the ability to stockpile. Many of my constituents are already worried about how they will access essentials because they are self-isolating, have lost their job or have other vulnerabilities. Now, like never before in so many of our lifetimes, we need the community-mindedness that got previous generations through such emergency situations.

We also need to start talking about how those of us who are fit and well—and who have contracted and come through the other side of covid-19—can help key sectors of the economy and emergency services to cope with what is to come. I suspect that, in time, with self-isolation and illness, we will need to mobilise that volunteer army. But that can only happen if we ensure that everyone has their income protected. Support for business is important, but at the end of the day it will be income protection, in whatever form that takes—a cash grant or a temporary universal basic income—that will finally give everyone the comfort to do the right thing by society. That will give the answers to the questions that we are all getting from businesses, the self-employed, renters and others.

I hope that, within hours, rather than days, the UK Government will do the right thing and guarantee incomes, as we have seen in other nations. We are willing to discuss any potential measures that the UK Government are thinking of in order to ensure that this is done properly and quickly.