Statutory Sick Pay and Protection for Workers

Rachel Reeves Excerpts

Wednesday 18th March 2020 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

It is an honour to follow my right hon. Friend the Member for East Ham (Stephen Timms), who made a powerful speech, particularly about refugees and asylum seekers. Their plight, and the specific issues they face, have not been discussed nearly enough in the past few days and weeks.

At times of national and, as in this case, global crisis, only Governments have the resources to protect our society and our health, to protect the most vulnerable, to protect businesses and production, and to protect workers. Markets cannot do that; only the Government can. That is why the Government must step up to ensure that we protect all our citizens, to direct our national economy, to help and support the people who most need it, and to ensure that resources get to where they are most needed.

I will talk primarily about issues with statutory sick pay, but let me first say something about the reports in the newspapers today that some Harley Street clinics are offering coronavirus tests for £395. That means someone can get the test if they have the money, but someone who works in a GP surgery cannot get it. That is utterly unacceptable. The role of the Government is to intervene to ensure that resources go where they are most needed—not to the rich and powerful, but to the people delivering our frontline services, who need protection. I urge Ministers to do that.

The measures taken by the Chancellor yesterday were necessary and worth while to protect our economic infrastructure and to support the most severely hit sectors of our economy. They were also necessary to support businesses, which are not responsible for the collapse in demand they are experiencing. The same is true of workers—they are not responsible for the predicament they find themselves in—yet support for them was missing from the Chancellor’s statement yesterday. The Minister has said today—the Prime Minister has said it too—that everybody will be supported to do the right thing. We all want that, but I am afraid at the moment that is not the case. People are not being supported to do the right thing. For many people, the right thing is not to go to work—not to spread this virus, but to stay at home.

If we really want people to do the right thing, we need to support them to make that decision, so let me turn to statutory sick pay. This point has been well rehearsed in debate both today and yesterday, but it obviously needs to be made time and again, because so far the necessary measures have not been taken. Statutory sick pay is not enough for people to be able to support themselves and their family. The level of statutory sick pay is insufficient.

The ineligibility is also a huge problem. If people are self-employed or earn below the lower earnings limit, they are not able to get statutory sick pay. Some of the people who most need it are denied the support that the Government say is necessary. Other people may not be sick, but also need support. If they are self-isolating, they might not have symptoms or be sick, but the right thing to do is to stay at home. If we want people to stay at home, they need support.

Similarly, we will have a statement from the Secretary of State for Education later and if, as now seems inevitable, many parents will have to take time off work to look after their children, they will need support to do the right thing, although they will not be sick. Of course, many people also face redundancy because their businesses cannot employ them anymore. Or if they are self-employed, the work is just not coming in. At the moment, those people are not able to claim statutory sick pay, and they will have to wait in the queue for universal credit or ESA if they have the contributions. That is not supporting people to do the right thing.

[Chris Stephens (Glasgow South West) (SNP)]

Does the hon. Lady agree that as workers have had their shifts cancelled, or have been told that their hours will be reduced—many of them are on zero-hour contracts—they, too, need the support that she is rightly saying should be given to workers?

[Rachel Reeves]

The hon. Gentleman is right. For many people, if they have a temporary reduction in their work, they can draw on their savings, but many of the people I represent—and many of his constituents as well—do not have savings to draw on. The Resolution Foundation published evidence last week before the Budget—to try to influence the Budget—that showed that 60% of people on low and middle incomes have less than £100 of savings. They do not have the resources to draw on even temporarily for a short time to pay the rent or the mortgage, or to put food on the table.

We must offer more support. That is what other countries are doing. In Norway, full pay is given to those laid off for 20 days. The self-employed get 80% of their average income over the last three years. In Sweden, laid-off workers are guaranteed 90% of their income: the Government will pick up half of that and employers are expected to pick up the other half. In Denmark, the Danish state will pay 75% of the salaries of laid-off workers. That is the same in many other countries. If it is good enough in Denmark, Sweden, Norway and other countries in the European Union and elsewhere, it is frankly good enough for workers in this country too.

It is now urgent that the Government come to the House and tell us that support is not just available for business—although that is very welcome—but is available to workers as well. Unless that happens, people will not be able to self-isolate and stop the virus spreading. The health crisis will become an economic crisis and many people will pay the price for the virus. It does not need to be that way. Let us look at income replacement, and quickly, to ensure that help is available.

As important as helping people now is, if we put in place income replacement so that people are not laid off or made redundant, it will also support the economic recovery. The pandemic will pass—we must believe that and we know it is the case—but when it does, and people want to go out again and to start spending in shops, restaurants, bars, theatres and cafes and to travel on aeroplanes, we need to ensure that the economic fabric of our country is still intact. The best way to do that is to ensure that workers remain attached to the firms that have been employing then. Income replacement can help people now, but it can also ensure that our economy gets back on a sound footing when the crisis has passed. To build the economy we need to see after this, I urge the Government to introduce urgently a system of income replacement.

The issue of renters has also been mentioned by Front Benchers and others. There was support yesterday for people with mortgages, and that is very welcome, but many people, especially those in precarious work or on low pay, do not have mortgages—they rent privately or in the social sector. In my constituency, fewer than a third of homes are owner-occupied; the others are either in the private rented sector or the social rented sector, and we need to do much more to support those people as well, because if they are on statutory sick pay now, or have seen a fall in their incomes or are expecting to be made redundant, frankly they are not going to be able to pay their rent in the days and weeks ahead. It was welcome that the Prime Minister said there will be support for renters, but we need to see the detail of that, and we need to see that support coming directly to landlords and renters to ensure that nobody is penalised because they do not have the money to pay their rents right now. That requires support for local authorities, who are big letting agents, and big providers of social housing; the support needs to go to the housing associations too and also large landlords, and we should be working with local government to ensure that we are reaching and talking to the biggest letting agencies and estate agents to make sure that support is getting to the people on the ground.

Again, I cannot stress enough how important this is; this action is needed urgently. The representative of the hospitality sector said last night that we are staring at hundreds of thousands of redundancies in that sector alone, so income replacement and support for people in the rented sector is crucially important.

The support for mortgages is a three-month holiday, and I say again that I am not sure that that is the right approach in the private rented sector, because a three-month holiday on a person’s mortgage which can then be added to their mortgage debt is one thing, but if in three or four months’ time someone has four months’ worth of rent to pay, that is not going to be much good if they have found their incomes have not recovered by then. We therefore need to be sensitive about ensuring that the support is there for the period of time that it is needed for.

Finally, I want to say something about gas and electricity and broadband and television licences. These are all essential services for people, and they will be more essential in the weeks and days and months ahead as more people are having to stay at home. Broadband is now absolutely an essential service, because the only way that many people can get food delivered is by ordering online. Again I urge Ministers to say to the providers of those essential services that nobody should be cut off from those essential services as long as the pandemic lasts, because otherwise people will find themselves without the basic infrastructure to be able to stay in their homes.

This global pandemic has thrown into sharp relief some of the problems in our labour market and in our social security system, so when this is all over we cannot go back to business as usual. If people cannot survive on £94.25 statutory sick pay when there is a global pandemic, they cannot survive on £94.25 at any other time, so we need to look at the waiting time for universal credit and the level of statutory sick pay, and who is eligible for it, and also, frankly, how our labour market works. We have 1 million people on zero-hour contracts and we have almost 5 million people who are self-employed—some choose to be, but many have no choice—so we need to look at how our economy works and who it works for, because whether we are in the midst of a global pandemic or not, there are too many people in our country that our economy, our labour market and, frankly, our society do not work for.

--- Later in debate ---

[Will Quince]

I thank the hon. Gentleman for making that case. I know from my postbag and email account that a number of businesses and individuals affected, who are concerned on health grounds or who have concerns about their employment or financial status, will contact their Member of Parliament. We are not always the first port of call—we are sometimes the last—but we are one where people expect to be able to get a response quickly, so I will look at what further guidance and advice we can give to Members of this House and through local authorities. That point about getting the message out to local authorities may well have been heard, because the relevant Minister, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Thornbury and Yate (Luke Hall) , is sitting on the Treasury Bench behind me.

The hon. Member for Newport West (Ruth Jones) raised the point about SSP and the rebate for employees, and whether that could be for more than two weeks. I understand the point she is making. The current Government advice is for people to self-isolate for seven days or for 14 days if in a household, so we feel that the two-week limit on rebates is a proportionate response. She also asked why SSP is not at the same rate as the living wage. The current system is designed to balance support for the individual with the costs to the employer. As the Minister for Disabled People, Health and Work mentioned at the beginning of this debate, we have put £1 billion into the welfare system to provide additional financial security for people, and people on low income can get a top-up, where applicable, through UC.

Numerous hon. Members, including the hon. Members for Sefton Central (Bill Esterson) and for Leeds West (Rachel Reeves), raised a point about the private rented sector. Today at Prime Minister’s questions, the Prime Minister did say that we will be bringing forward legislation to protect private renters from eviction, and the Ministry of Housing, Communities and Local Government is considering whether we need to go further on that point.

The right hon. Member for East Ham (Stephen Timms) and the hon. Member for Airdrie and Shotts (Neil Gray) both raised a point about the consultation on the lower earnings limit. Our immediate concern in dealing with the covid-19 outbreak is to ensure that a suitable financial safety net is in place, and the benefits system does provide that. We estimate that about 60% of people earning below the lower earnings limit are already in receipt of benefits. Our longer-term aim in that consultation was about preserving the link between the employer and the employee so that the individual receives appropriate support upon return to work. That is less relevant when most people are facing short periods away from work. I or the Minister for Disabled People, Health and Work would be happy to meet those Members at a later point to discuss that further.

Numerous hon. Members asked why the focus so far has been on businesses and has not just been about individuals. It is so important that organisations are able to carry on trading, which is why the initial focus of Her Majesty’s Treasury has been on supporting business and keeping people in work where it is sensible and appropriate, based on Government guidance, to do so. Ultimately, that protects so many individuals in our society, but of course we are also looking at other measures for workers.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah), the right hon. Member for East Ham and the hon. Member for Airdrie and Shotts all made the point about raising the level of statutory sick pay. We continue to look at other support for workers to see what best mechanisms are available. Thankfully, a period of absence is likely to be short—we believe between seven and 14 days—but we know that some may need extra support, as Members across the Chamber have said. We know that low-paid workers are likely to be receiving additional support through universal credit, for example, and the advantage of universal credit is that it will go up if income falls to the equivalent SSP level.

[Rachel Reeves]

I thank the hon. Gentleman for giving way and for addressing the points that hon. Members have made. It is true that people will not have to take that long off to self-isolate for their recovery, but overall, there is likely to be a suppression of demand in the economy for a longer period. The idea that people may be off work for only one or two weeks is fine if that is for health reasons, but if it is because their business is closed or there is just not work available, it is likely to be a lot longer. That is the point that many Members have been trying to make.

[Will Quince]

I thank the hon. Lady for making that point. I reassure Members that the Government are doing all they can to ensure that everybody is supported to do the right thing. It is crucial that everyone follows the Government guidance on self-isolation—that has been clear throughout the debate—to protect themselves and others. The measures that we have announced and will put forward in the emergency Bill will support people to do so.

To come directly to the hon. Lady’s point, the Chancellor has announced that in the coming days the Government will go much further to support people’s financial security, working with trade unions—another point made by the hon. Member for Stockport (Navendu Mishra)—and businesses to urgently develop new forms of employment support to help to protect people’s jobs and incomes through this period. I know that the hon. Lady would like to tempt me to go further but, as I think she will understand, that is somewhat above my pay grade. It is very important, however, that debates such as this take place, because it will have been heard by Her Majesty’s Treasury and will be taken in the spirit of working collaboratively on a cross-party basis. I certainly take those ideas on board, and if Members have further ideas about how we can better support some of the most vulnerable people in our society, my door is always open, and I would welcome them coming forward with those.

The right hon. Member for East Ham, the Chair of the Select Committee, raised the point about the habitual residence test. The test has operational procedures already in place to expedite confirmation of eligibility, but I will take this point away and give it further thought—I had not given it consideration before he raised it and I would be very happy to meet him to discuss it further.

We have a safety net that helps people facing hardship if they cannot work or are seeking work. Depending on their individual circumstances, employees can claim universal credit and/or new-style ESA or JSA. As the Prime Minister set out, the Government will keep everything under review. The package that was set out at the Budget and the new measures that were recently announced should give some reassurance that support will be provided to support jobs, income and businesses. As the Chancellor said, we will do “whatever it takes”.

We are in extraordinary times. The coronavirus pandemic is the most serious public health emergency that our nation has faced for a generation. Our policy is to protect lives and fight this virus with everything we have, and the Government have been clear in their approach: we will do whatever it takes to get the nation through these testing times. We will protect people, their jobs and businesses through this period to ensure that we keep as many people as safe as possible.

Question put and agreed to.

Resolved,

That this House has considered the matter of Statutory Sick Pay and protection available for all workers.