Statutory Sick Pay and Protection for Workers

Stephen Timms Excerpts

Wednesday 18th March 2020 Commons Chamber

[Justin Tomlinson]

Let me make a little progress, because I think I am about to cover some of the things being asked about. I promise that I will take more interventions.

Extraordinary times call for extraordinary measures, which is why we have extended statutory sick pay to those who are self-isolating in line with the latest Government health guidance. The guidance is available online on gov.uk and ensures that eligible individuals, whether they are sick or self-isolating, will be entitled to statutory sick pay if they are unable to work because they are following Government advice.

The upcoming emergency Bill will mean that for people affected by coronavirus, statutory sick pay will be payable from day one, instead of day four, and currently it will be backdated to 13 March. We removed those waiting days to get support to people as quickly as possible. These are crucial measures to ensure that employees do not attend work when they should stay at home to help to keep themselves and others safe. The circumstances are exceptional and we urge employers to do the right thing, use their discretion and respect the medical need to self-isolate.

Statutory sick pay is a legal minimum, and employers can offer more. Where possible, employers should support their employees to work from home to help to slow the spread of the virus. If employers do feel the need to require evidence, people who are advised to self-isolate for coronavirus will soon be able to obtain an alternative to the fit note by contacting NHS 111 rather than visiting a doctor. We are all aware of the need to protect GP surgeries so that they can concentrate on key areas of work.

Accordingly, the Government will ensure that businesses are supported to deal with the temporary economic impact of the outbreak of coronavirus. Small and medium-sized enterprises are at the heart of our economy, symbolising the hard work and enterprising spirit of our nation. To support such employers with the increased costs of sick pay, the emergency Bill will provide that employers with fewer than 250 employees can reclaim up to two weeks’ statutory sick pay for sickness absences related to coronavirus. That includes those who are required to self-isolate in line with Government guidance. The measure could provide more than £2 billion of support for up to 2 million businesses, and will be crucial to ensure that our economy keeps running.

The measure on statutory sick pay is in addition to others to support businesses that were outlined by the Chancellor yesterday: £330 billion of Government-backed and guaranteed loans; additional cash grants of up to £25,000 for businesses in the retail, hospitality and leisure sectors with a rateable value of less than £51,000; and cash grants of £10,000 to 700,000 of our smaller businesses. The Government will do whatever it takes to support our economy.

Of course, not everyone is eligible for statutory sick pay, which is paid by employers. Gig workers and those on zero-hours contracts may be entitled to sick pay, and should check with their employer, but millions of hard-working people who are self-employed or in the gig economy will need our help, too. That is why we are making it easier to access benefits during this period.

The shadow Secretary of State talked about disability benefits and the announcement that we made earlier this week. The first decision was to remove face-to-face assessments, because we recognise that a significant proportion of those who could be claiming disability benefits are vulnerable. We want to avoid them needing to travel unnecessarily and to sit in busy waiting rooms, so we decided to stop face-to-face assessments. However, we do not want to stop new people gaining access to the support that they are entitled to, so we are seeking to continue to do paper-based and telephone reviews, but prioritising those who are new claimants, and looking at the workforce on a daily basis.

[Stephen Timms (East Ham) (Lab)]

I very much agree with the policy that the Minister is setting out. Will he clarify the intention for reassessments? He will know that Mind and one or two others have suggested that reassessments ought not to go ahead at the moment, partly because it is very difficult for people to get medical evidence in support of their reassessment claim at a time when doctors are very busy with something else.

[Justin Tomlinson]

I absolutely understand that point, and the right hon. Member and I discussed it when we first made the announcement. The absolute priority has to be new claimants who are seeking to get support through the disability benefit system, so we are looking on a daily basis at what we can do. I do not envisage that we will be able to do much beyond that, but I want to make sure that new claimants can get support. That was why, at the beginning of my speech, I paid tribute to the fantastic work of those who are working on the frontline, who—like all people—are anxious about events, but are still, when they can, coming in to make sure that the vulnerable people in society can access the support that they are entitled to.

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[Stephen Timms (East Ham) (Lab)]

The hon. Member for Airdrie and Shotts (Neil Gray) mentioned in passing that the Work and Pensions Committee met this morning. We took evidence from five organisations: the Royal National Institute of Blind People, Mind, Scope, Citizens Advice and the Zacchaeus 2000 Trust representing the Disability Benefits Consortium. The main purpose was to take evidence about disability benefit assessments, but of course we took the opportunity to raise some of the current issues that we are discussing in this debate. I thank the members and staff of the Committee, and the witnesses from all those organisations, for being willing to take part in that useful session this morning, despite the current difficult circumstances.

I welcome the announcements that the Government have made. As the Minister for Disabled People, Health and Work, the hon. Member for North Swindon (Justin Tomlinson), has recognised, there is going to be a good deal more to do to protect individuals through this very difficult time; that is underlined by the examples from other countries that we have heard today. I very much hope, with others, that those additional announcements will happen very soon because we need them very fast.

I want to raise a couple of issues about universal credit. I put the point to the Chancellor yesterday that somebody who is self-employed and who self-isolates very often will have to forgo their income as a result. The advice is to apply for benefits, but if people apply for universal credit, they do not get any help for the first five weeks other than a loan that has to be repaid. It seems to me that people in that position are not going to be willing to give up their income if all they are going to get is a loan.

In answering my question, the Chancellor correctly said that people can apply for the new contributory employment and support allowance. I welcome the fact that that is now available not only to people who are sick, but to people who are having to self-isolate because others in their household are sick. However, as the Minister will recognise, there are going to be quite a lot of people in that position who do not meet the contribution criteria for ESA because they have not paid 26 weeks’ worth of contributions, having earned above the lower earnings limit, within the last two years. The only opportunity those people will have is to apply for universal credit. However, if they only get a loan, many will feel that they have no alternative but to carry on working—even though they know that they really ought to self-isolate.

The attraction of the proposal made by the hon. Member for Airdrie and Shotts—and which has been made by Citizens Advice and others—is that these advances should be made as non-repayable grants for the duration of this crisis. That is something that the Department could readily do. I recognise that expecting the Department very quickly to make big changes to its IT systems for supporting universal credit may not be practical, but it could quickly make the advances non-repayable.

I am pleased to see both the Minister for Disabled People, Health and Work and the Under-Secretary of State for Work and Pensions, the hon. Member for Colchester (Will Quince), on the Front Bench. They are very familiar with the Select Committee’s concerns about the five-week delay in universal credit anyway. There is growing evidence—including a striking article published in The Lancet this month—that people are being pushed into clinical depression due to being on universal credit rather than on legacy benefits. The Trussell Trust has found that many more people on universal credit need to go to a food bank compared with those on the predecessor benefits. Looking at what it is about universal credit that is causing those problems, the only big structural issue is the five-week delay. As the Ministers know, the Work and Pensions Committee will shortly begin an inquiry on that particular topic. That is a broader issue but, for the duration of the crisis, there is a powerful case for making the advances non-repayable.

I appreciate that this will not be the case everywhere, but it is the case in constituencies like mine. There are many working families who have leave to remain in the UK but do not yet have indefinite leave to remain. They are on what is called the 10-year pathway to securing indefinite leave, which means that every two and a half years they have to apply again for leave to remain. If they are working, they obtain leave to remain, but—I do not know whether this is universal, but it is certainly the case for a lot of my constituents—the card they receive making it clear they have leave to remain and are permitted to work in the UK also says they have no recourse to public funds. They are not allowed to claim any benefits at all, which in the current circumstance puts them in an extraordinarily difficult position. They are not allowed to claim ESA or universal credit at all. If they are in a position where they should self-isolate in accordance with the Government’s guidance, they will find that they suddenly have no income at all if they self-isolate.

There is a related issue with the habitual residence test, which is often applied, perfectly properly, to make sure people are habitually resident in the UK and are therefore entitled to benefits. I wonder whether there is a case for suspending the test, at least in some circumstances, because we want those who are working to be able to self-isolate when it is important that they do so. If they do not have access to public funds for one of those two reasons, they will find it practically impossible to self-isolate. I hope the Ministers and their Home Office colleagues will look at that.

Citizens Advice has argued that there should be a temporary repayment pause for claimants, which is a strong point in the current crisis. People currently have to repay their universal credit advances, or perhaps their past tax credit overpayments, through their universal credit, so there is a case for suspending those repayments.

The Minister for Disabled People, Health and Work said in his opening speech that “Everybody will be supported to do the right thing.” He is right to underline the importance of that but, as things stand, those who do not have recourse to public funds, because they do not meet the requirements of the habitual residence test, will not be supported to do the right thing, and it is very important that they should be.

In his Budget statement, the Chancellor said he is

“temporarily removing the minimum income floor in universal credit.”—[Official Report, 11 March 2020; Vol. 673, c. 280.]

When we came to read the Budget documents, we found that the position, as the Minister set out a few minutes ago, is that the removal applies only to those directly affected by covid-19 or by self-isolation according to Government advice. I think the Government should stick with what the Chancellor of the Exchequer actually said, which is that the minimum income floor will be suspended altogether, because a lot of self-employed people—my hon. Friend the Member for Harrow West (Gareth Thomas) gave us such an example—will see a big fall in their income because of what is happening in the wider economy, not because they are directly affected, as yet, by covid-19. Universal credit provides an opportunity to increase support where their income from self-employment falls. That could work very well, I think, if the minimum income floor was suspended altogether, as the Chancellor of Exchequer appeared to indicate would be the case in his Budget speech last week. I do hope that that will be looked at again, that the caveats that have been added to that commitment since might be taken away, and that the minimum income floor will be suspended altogether for self-employed people for the duration of this crisis.

I echo the point that was made a few moments ago by the hon. Member for Airdrie and Shotts (Neil Gray) about the tax credit disregard. As things stand at the moment, if someone’s income falls by less than £2,500, their tax credits do not increase at all. There is, in the tax credit system, a mechanism that can be used to provide people with help when their income falls, but to get the full benefit of that we would need to remove that £2,500 disregard. I appreciate that that is a matter for the Treasury, rather than for the Department for Work and Pensions, but I hope that it will be done.

Statutory sick pay is a big focus for this debate. The Government consulted last summer on extending statutory sick pay to those who are lower paid—to those who are earning below the current threshold—but the Government have not yet responded to that consultation, which was carried out several months ago. Surely now is the time to act. It was proposed then that statutory sick pay should be paid to people earning less than the lower earnings limit at 80% of their wage. That, I think, was the proposal on which the Government consulted. This is surely the time to fast-track that proposal—to bring it forward and put it in place. I appreciate that it will need legislation to do that, but it is very important that it is done, and I hope that it can be picked up in the legislation that will be published tomorrow.

[Stephen Kinnock (Aberavon) (Lab)]

On this point about statutory sick pay, there are two additional points on which the Government really do need to act. One is that this should be done in advance, up front, rather than making businesses reclaim, which is putting massive pressure on them. The other is that it is vital for the self- employed. Businesses in my Aberavon constituency are really under the cosh and they need both of these measures to be included in the rethink on statutory sick pay.

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[Stephen Timms]

My hon. Friend makes a couple of very important points. I very much agree with him on the first, but on the second, my understanding is that self-employed people in this position can apply for this new employment and support allowance if they meet the contribution conditions, which, of course, some will not. That is where universal credit needs to be changed. One of those routes is likely to be a solution for them, rather than statutory sick pay, because that depends on there being an employer in place.

My final point is about the argument that has been made by many, and I am sure that will be made again in this debate, that the overall level of benefits should be higher, at least for the duration of this crisis, than it has been up until now. I just want to make one argument in favour of that proposition. We always say, and we have said it on both sides of this House, that work is the best route out of poverty, and the system is designed to encourage people to seek and find work but, at the moment, there are lots of people—and it will be a growing number over the coming weeks—whom we do not want to work. We do not want to force people into jobs. For many, the position will continue to be the same in the next few weeks as it has been in the past, but there is this large and very important group whom we really do not want to be working, and we want them to be at home. That, in particular, makes the case for Ministers who are looking temporarily at raising the levels of benefits—statutory sick pay and universal credit and the others.

I welcome what the Minister said about the suspension of face-to-face assessments

for disability benefits. I think he suggested that, in practice, his Department will not conduct reassessments for disability benefits either. If that is the practical reality, it would be helpful if he stated that explicitly. I think that would be reassuring to a lot of people who are in receipt of disability benefits at the moment and expect to have to be reassessed in the next few months. That is always quite an anxious time for people in that position. If the reality is that they will not be reassessed for several months because everybody is busy with everything else, it would be helpful for that to be made explicit so that reassurance can be provided.

Of course, if it turns out that there are ways of doing the new assessments that do not require face-to-face meetings, and if that works well for new applications, hopefully lessons can be learned for the system in the longer term. However, if it was possible to make it clear that there will not be any disability benefit reassessments in the next few months, I think that would be widely welcomed.

[Several hon. Members rose—]