Long-term Health Problems and Work Outcomes

Philip Hollobone Excerpts

Tuesday 18th April 2017 Westminster Hall

[Mr Philip Hollobone in the Chair]

[Mr Philip Hollobone (in the Chair)]

Will Members not staying for the next debate please be kind enough to leave quickly and quietly? We now come to the important subject of the role of employers in improving work outcomes for people with long-term health problems.

--- Later in debate ---

[Craig Tracey]

I thank my hon. Friend for that intervention. I know she speaks from experience. She is a few steps ahead, mind-reading my speech. I will come to the valid point she makes, but I definitely agree with her comments.

Obviously such conditions can have many knock-on effects for families. When someone gives up work for health reasons, their partner will often cut back or stop working to become their carer. That can double the financial impact. Employers clearly have an enormous role to play in the health and working lives of disabled people and those with long-term health conditions. As the number of working people living with chronic health problems grows, the impact employers have on the population’s work and health outcomes—both positive and negative—will grow, too. Around 21 million people of working age in the UK will have at least one long-term condition by 2030. By the same year, the number of working-age people with cancer is set to increase from the current figure of 750,000 to an estimated 1.7 million. Ensuring that employers retain as many of those people as possible and support them to progress their careers will also help the Government to tackle some of the other big challenges facing our society.

The Government’s report “Fuller Working Lives: a partnership approach” and the recent independent review of the state pension age by John Cridland are both responses to our ageing workforce. Demographic change is sometimes presented as a problem for the long term, but we need to confront some implications now. In five years’ time, there will be 763,000 more people in the UK aged 50 to 64 and 292,000 fewer aged 16 to 49. One in eight people stop working before reaching the current state pension age due to ill health or disability, and raising the pension age will only increase that figure. It is inevitable that as people age, they are more likely to have health problems—half of over-50s have a long-term health problem—but it is not inevitable that so many should be forced to give up work.

More flexible and understanding employers would retain a greater amount of those people, and it would also mean that people would retire with bigger pension pots. The DWP has said that if the average earner worked to 65 instead of 55, they could have more than £200,000 in extra income and increase their pension by 60%. It would also be good for people’s health and the sustainability of the health service. The “Five Year Forward View” for the NHS in England recognises the need for “new partnerships” with employers to help people

“get and stay in employment”

as part of a

“radical upgrade in prevention and public health”

to protect

“the sustainability of the NHS, and the economic prosperity of Britain”.

I am pleased that the Government prioritised the critical role of employers in the Green Paper, which also makes a strong business case for employers to invest in inclusive workplaces and health and wellbeing. It would reduce the £9 billion direct cost of sickness absence and boost productivity through healthier, more engaged employees. The Green Paper includes welcome plans to ensure that the public sector

“leads the way in developing employment practices that allow disabled people and people with health conditions to flourish.”

But it is the Government’s proposals for the 26 million people working in the private and third sectors that could have the biggest impact on work and health outcomes, and it is on those that I wish to focus. The Green Paper asks how those employers could be incentivised to invest in the things we know create healthy workplaces and prevent people from falling out of work. How can we create a culture where people feel confident about disclosing health problems? How can we ensure employers have regular conversations with employees who are off work to agree steps to support their return? How can employers put in place timely access to occupational health and vocational rehabilitation support? The Green Paper proposes sensible reforms to statutory sick pay to ensure that people are not penalised financially by returning to work. It also proposes putting in place a one-stop shop for employers with information on the different things they can do to support staff and the return on investment they can expect to see from such measures.

While such measures would be welcome, they would not alone bring about the vision set out in the Green Paper of a society where everyone is ambitious for disabled people and those with long-term conditions, where jobs actively support and nurture health and wellbeing and where everyone at risk of long-term absence or falling out of work due to ill health gets early action as needed to stay in or return to work. The Government acknowledge that much more needs to be done.

The Green Paper is a call for bold, ambitious ideas and I understand the response from individuals, charities, employers and others has been very encouraging, with thousands already putting their views forward. That momentum must not be lost. Making progress towards the Government’s vision will bring enormous benefits to working people who live with long-term health problems, and to their families, employers, the economy and taxpayers. My first question to the Minister is therefore how the Government will involve those outside Parliament who have engaged so valuably up to now and have so much to bring to the debate.

My second question relates to one of the bold ideas put forward to rapidly improve the ability of employers to provide effective early support for those at risk of long-term sickness absence. The Green Paper includes a section on group income protection insurance, recognising that it not only provides an income to those who are too ill to work, but also includes vocational rehabilitation and practical support for employers, which together prevents and reduces sickness absence and stops people from falling out of work altogether. Group income protection insurance is purchased by employers, who cover their staff. One virtue of that is that, save for the very highest earners, there is no medical underwriting, which means that insurers do not ask any questions about employees’ medical history or existing conditions. People with health problems are covered at no additional cost.

The evidence is that group income protection is highly effective. The Green Paper cites a report from the Centre for Economics and Business Research, which found that such insurance reduces the length of sickness absence by an average of 16.6%. Research from one provider, Unum, found that seven out of 10 people with serious health problems who used its return-to-work service got back to work with the same employer. The most common conditions for those returning to work were mental health and musculoskeletal problems, which are the two health problems prioritised in the Green Paper.

Currently, just 7% to 8% of employees have group income protection from their employer. The Green Paper states that the Government think group income protection insurance has a much greater role to play. Coverage is particularly low among female workers and those working for small and medium-sized employers, yet both are most likely to benefit from the support it provides. Rates of sickness absence and disability are higher among female workers than men, yet for some reason employers fail to protect them in equal numbers.

SMEs are less likely to have experience of managing someone with a serious health problem or to have access to human resources, occupational health or vocational rehab expertise. As a former small business owner myself, I know what an impact it has when one of a small team needs to take time off. I know how difficult it can be to try to support an employee with a long-term condition, while also meeting legal obligations and keeping a business on track.

In my role as chair of the all-party parliamentary group on insurance and financial services, I have received representations from across the sector that make the case for tax incentives for employers to invest in group income protection for their staff. Insurers, their trade bodies and employers, through EEF, make the case that a tax incentive for employers would be the most effective way to increase coverage. They argue it would raise awareness of the benefits of providing the insurance, would act as a signal from the Government that group income protection is something good that employers should consider investing in, and would stimulate demand for and supply of this insurance.

Working with its members, the Association of British Insurers has produced an economic evaluation highlighting the gains to taxpayers if a modest incentive increased coverage. Fewer people would fall out of work or would require state support. Those in work and those who were too ill to work and so receiving an insured income would continue paying taxes on their salaries. Will the Minister explain how the Government intend to support a much greater role for group income protection insurance? Are they minded to consider the case for a temporary tax incentive for employers, particularly SMEs, to invest in it?

The Green Paper vision is rightly ambitious and I am sure it will have broad support from those inside and outside the House who follow the debate. The Green Paper talks of a 10-year plan to achieve that, but there is clearly potential to make great strides in a much shorter timeframe. The Government can take action now that will make a huge difference to the lives of working people with long-term health problems, their families, employers and the taxpayer.

Janey, a solicitor who shares her story in a guide from the British Heart Foundation, was 35 when she was diagnosed with a serious heart condition after giving birth to a baby boy. Janey’s employer communicated with her and together they agreed a successful plan so she could return slowly and steadily to her job, starting after a long absence on a two-day week and building up to four days a week over six months. She got back to work doing longer hours, but always making sure she was home in time to be with her son. That is the kind of positive experience we want everyone to have. So my final question is how the Government will measure success in delivering their vision. What are their top priorities in supporting employers to improve the work and health outcomes of people with long-term health problems?

I welcome the Government’s approach to this important subject. There are some exciting opportunities for innovative solutions to help those with long-term problems to remain in work. I look forward to the Minister’s response.

[Mr Philip Hollobone (in the Chair)]

I know we are talking about long-term health issues, but I can see that the Minister is in some discomfort with a short-term health issue. It would be perfectly in order if she would like to give her speech sitting down.