House of Commons Hansard Debates for 26 Nov 1990

Mr. Grylls : I am reluctant to intervene for the second time and run the risk of becoming a bore. Earlier I asked my right hon. Friend a question and he has omitted to answer it, no doubt accidentally. Has he consulted the Minister with responsibility for small businesses? If he had done that, he would have avoided criticism from the National Federation of Self Employed and Small Businesses and other organisations. Has my right hon. Friend had such consultations, and if so, what did the Minister say? Has he considered a two-tier system reducing from 100 to 80 per cent. for large employers and down to 90 per cent. for smaller employers? My right hon. Friend will know of good examples of two-tier systems in legislation.

Mr. Newton : I shall take my hon. Friend's latter point first. I am always reluctant to rule out looking at anything, because, as my hon. Friend and the House know, I am willing to consider constructive suggestions. I hope that I have clearly shown that the way in which we have geared the reduction in national insurance contributions will be particularly advantageous to smaller employers. It would be difficult at the same time to go down the path of gearing the basic reimbursement arrangements so that they would also be especially favourable to small employers. Many of the advantages of a straightforward and simple operation

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of the scheme are in some ways enhanced by my proposals, especially the one to get rid of the funny 7 per cent. compensation arrangement. Those advantages would be lost if we attempted to have different rates of reimbursement for firms of different types and sizes. I emphasise to my hon. Friend the Member for Surrey, North-West (Mr. Grylls) that I am not attempting to evade his question about consultation. I hope that I have not given that impression. He will be aware that the proposals were developed during the public expenditure round that led to my uprating statement on 24 October. They were examined in terms of the context, pattern and priorities of social security expenditure as a whole.

I make no apology for that, but it meant that, by the very nature of the way in which the processes work, it was not possible to engage in advance in substantial consultation. We shall be more than willing to listen and respond, as I have done in the debate, to representations on specific issues. In the debate and in future, I shall seek to justify on their merits the general thrust of the proposals and their basic structure and purpose.

We have made sure that all the relevant organisations have been put in the picture about our proposals. They have been sent copies of the Bill. If they want to make particular points to us, whether through my hon. Friend the Member for Surrey, North-West or in any other way, I shall look at them. However, I do not wish to hold out the hope that we shall move away from the basic thrust of these proposals, which I believe are justified on the ground that I have given many times.

Mr. Battle : Does the Bill not include a power for the Secretary of State to enact further reductions without having to come back to the House for the matter to be discussed? Is this not the last chance for us to discuss it?

Mr. Newton : The proposal is that there should be a power to vary the rate, but not in a way that would preclude parliamentary discussion.

Ms. Short : Not on a Government motion.

Mr. Newton : The hon. Lady is making the point that the proposal in the Bill involves the negative rather than the affirmative procedure. The Opposition have never shown any reluctance to use the prayer as an instrument for parliamentary debate. It is unlikely that the Opposition would not wish a debate to take place. One can vote on a negative order, just as one can vote on an affirmative order.

Ms. Short : Give us an affirmative order, then.

Mr. Newton : I do not know whether the hon. Lady will have the chance to make a speech. She has made every point that she could make in interventions in mine. If she ever gets the chance to make them in a connected form, I shall listen to them with proper interest. Fortunately, my right hon. Friend the Minister for Social Security and Disabled People will be the Minister who will reply in a connected form.

Whether in a connected or in an unconnected form, I shall now move reasonable rapidly to bring my speech to a conclusion. [ Hon. Members-- : "No."] Rare is it for the House to demand to hear more of the Secretary of State for Social Security who has been going on more or less for ever on a reasonably complicated and sometimes arcane matter. I should feel guilty if I did not give the hon.

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Member for Ladywood the chance to make her remarks in a connected form and for once to make them standing rather than sitting.

Ms. Short : I have not done badly.

Mr. Newton : No, the hon. Lady has not done badly. I congratulate her on her self-restraint. Let us see whether it continues for the rest of the debate.

I think that the House will be pleased, although I began to doubt that a moment ago, to know that I am nearing the end of my long speech, or what might be seen as a long series of answers to interventions. Before I reach the end, I must say something about statutory maternity pay, which is another relevant point, although it is not covered by the Bill.

In my uprating statement, I said as part of the background to these proposals, that it was no longer sensible for the development of statutory sick pay and of statutory maternity pay to go hand in hand. There is much less occupational cover for maternity leave than there is for sickness, and in that case, the level of reimbursement will remain at 100 per cent. for SMP, with compensation payable at an appropriate rate for the contributions payable on SP.

As I said in my statement, that separation has the advantage of enabling me to treat the SMP rate differently as well. I propose to increase the flate rate element of SMP by rather more than the full RPI increase--by £1 a week over the rate of inflation--so that it will go up by £5.05, from £39.25 to £44.50. I have made a parallel increase in the residual national insurance maternity allowance, which will be raised from £35.70 to £40.60.

Looking at what is provided as part of the even wider package--looking at SMP, which is not covered by the Bill, as well as SSP, some of the proposals on which are covered--there is overall the additional ingredient of a real increase in benefit for some 315,000 mothers-to-be, which has been widely welcomed. I have to acknowledge that that is only an incidental advantage of these proposals, although it is an important one.

The main point is the one that I made in the uprating statement and have reiterated today, making it as clear as I can. Against the background of the many demands on social security and the development of occupational cover for short-term sickness, the resources of the taxpayer should be more clearly concentrated on those least likely to have occupational provision or on other areas of social security for which employers cannot be expected to provide. That is the objective of the Bill, and I commend it to the House.

5.14 pm

Mr. Michael Meacher (Oldham, West) : We have just listened to an extremely long and agonised defence of the Bill. I think that I will carry the whole House with me when I say that that speech has not increased the Bill's credibility.

Perhaps the most charitable thing that can be said about this mean, nasty and unnecessary little Bill is that it is a hangover from the Thatcherite era. Like the author of that era, it is harsh on the low-paid, especially women. It bases its rationale on a selective and highly misleading interpretation of the evidence and it ignores facts where they are inconvenient. I have not heard such a dishonest

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and deceitful defence by a Secretary of State for a considerable time. The length of his speech was in inverse proportion to the credibility of the Bill.

The Bill pushes further still the prejudice of "public sector bad, private sector good", even when the employers passionately disagree. Here we have the authentic mark of Thatcherism, as the Secretary of State, a member of the Cabinet, will agree. It is being foisted autocratically on people, without a shred of consultation. When the right hon. Member says that he will listen to arguments in future, but the remaining stages of the Bill are being rushed through on Wednesday, his assurance does not carry much conviction. It shows how anxious the Government are to push through the Bill before systematic opposition to it can be mounted. If the Prime Minister wanted a squalid little memorial to her reign, this could be it.

The effect of the changes that the Secretary of State has outlined, according to an answer given by the Under-Secretary of State two weeks ago, is that 3 million employees with earnings between £125 and £175 a week will no longer be eligible for the higher rate of statutory sick pay if they fall sick after 6 April next year. About one fifth of that number, or about 600,000 people, are expected to claim statutory sick pay annually, and they will lose an average £9 a week. Because low-paid workers are primarily the victims of these measures, 60 per cent. of all the losers are expected to be women. I should add immediately that these cuts next year are not new, nor the first. Similar cuts were imposed on sick employees only a few months ago. In April this year, the Secretary of State removed nearly 2 million workers earning between £90 and £125 a week from eligibility for higher rate SSP. Of those, about 300,000 are expected to claim SSP annually, and they are losing an average of £13 a week each week. As many as three quarters of those losers are expected to be women.

The Bill is part of a clear pattern. The number of losers and the amounts that they will lose are even greater this year, but the pattern of whittling down the sick pay rights of those on low incomes has already been set. There is every reason to suspect that the Government will continue the process of erosion each year that they remain in power. The Secretary of State glided over this point, so I invite him, if he wishes to take time from my speech, despite the length of his, to give the House a guarantee that there will be no further cuts. We are interested to know the Government's intentions. Does the right hon. Gentleman wish to intervene? He does not. We can draw our own conclusions from that.

There is another striking fact about the Bill : the Secretary of State has the support of no one in introducing it, which is fairly rare. The Confederation of British Industry, the National Federation of Self Employed and Small Businesses, the Trades Union Congress, trade unions and voluntary bodies such as the Low Pay Unit and the Disability Alliance do not support the Bill. I suppose that it is a true Thatcherite Bill--two fingers to the rest of the country, the Prime Minister is right and everyone else has got it wrong. The Bill does not even have the support of the Government's adviser, the Social Security Advisory Committee. Because the Government have not consulted about the Bill, the SSAC has not had a chance to comment on these proposals. It gave its view on the April 1990 changes which, as I said, were on almost exactly the same lines as the Bill's provisions. Like the Bill, those changes

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increased the higher rate pay threshold by much more than inflation. The SSAC opposed that because the majority of the losers were women and "a significant number" of the losers would not have occupational sick pay cover and would be significantly worse off if they had to claim statutory sick pay.

Like the Bill, those changes in April 1990 increased the higher rate benefit by less than inflation. The SSAC opposed that a year ago because it would impose additional financial burdens on businesses, because employers would be less willing to employ disabled people and those with poor health records and because employers who did not have their own sick pay schemes might be deterred from introducing them. Those were comprehensive and compelling reasons for rejecting the April 1990 changes. They are no less comprehensive and compelling reasons for rejecting these further measures in the Bill and, I repeat, they are the reasons given by the Government's advisory body.

As the Secretary of State has no supporters for the Bill--except, of course, the Treasury--I turn to his reasons for introducing it. In his uprating statement and again today, the right hon. Gentleman gave three reasons. He said that statutory sick pay rates were irrelevant because of the expansion of private occupational sick pay coverage--the crucial point about which we had so many exchanges. On 24 October, the right hon. Gentleman said :

"Occupational sick pay schemes have grown to such an extent that more than 90 per cent. of the work force now work for employers providing this cover This in turn means that, for the great majority of those in work, the rates of SSP bear little or no relation to the amount that they actually receive when sick."--[ Official Report, 24 October 1990 ; Vol. 178, c. 349.]

As the Opposition made clear repeatedly, the right hon. Gentleman was citing a 1988 survey, but in such a selective and grossly misleading manner that his defence of it was extremely deceitful and unworthy of him--[ Hon. Members-- "No."] It was unworthy of him. I have great respect for the right hon. Gentleman's integrity, but today he was trying to defend the indefensible, and it showed. A series of interventions by my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) and others of my hon. Friends completely undermined the basis of his case.

The Secretary of State mentioned the increase in the number of employers offering some sort of private scheme, but he did not say--these are the facts--that substantial numbers of employees are not covered by such schemes. He did not respond to my point. I said that the survey showed that 44 per cent. of private sector employers did not offer any form of occupational sick pay provision. Worse still, it is in the hazardous industries, such as mining and construction, where sick pay provision is most needed, that it is least likely to be available. Moreover, more than half the firms with fewer than 10 employees--these firms are growing the fastest--have no sick pay scheme.

The picture is even more patchy than that. Of those firms that have schemes, half of private sector and two thirds of public sector employers operate exclusion clauses. The Secretary of State said little about exclusion clauses even where there are such things. They limit the coverage to certain groups of employees in terms of their length of service, hours of work, grade of job, age or earnings ; a range of exclusions cut the cover that people have. Nearly three quarters of all employees are

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potentially affected by these exclusions. The Secretary of State continues to use the extremely deceptive figure of 90 per cent. That is unworthy of a Government seeking to defend a Bill when it is the hinge on which to justify their proposals.

All this evidence shows that, when the Secretary of State said again today that 91 per cent. of the work force now work for employers providing occupational sick pay cover, he is being extremely Jesuitical. In fact, a substantial proportion of the work force--the right hon. Gentleman would not hazard a guess, but the percentage is certainly several times larger than the 9 per cent. he implies--are not covered by occupational sick pay provision and have only the state SSP scheme on which to fall back. My hon. Friend the Member for Ladywood hazarded a guess about the number, and I suspect that we may be talking about 10 million to 15 million workers. The Bill is a major erosion of their employment rights.

Mr. Newton : Despite my obvious disagreement with several of the hon. Gentleman's points, I have not sought to intervene frequently in his speech. I do not think that he can mean that the Bill is a major erosion of people's rights. These proposals do not affect the rights of any employee. If I understand the point aright, the remarks which the hon. Gentleman just made--indeed, almost everything that he said--have absolutely nothing to do with the Bill.

Mr. Meacher : The right hon. Gentleman is splitting logic. He knows perfectly well that I am referring to the whole package of measures. I am not talking specifically about clause 1. This is a narrowly drawn Bill. The right hon. Gentleman knows that we are discussing the provision of sick pay for employees and the means by which that is done.

Mr. Newton : It is important to clear up this point. The hon. Gentleman said that I chose my words carefully, as though that were an accusation. I do not think that he would want to mislead anyone. I did not try to avoid referring to other parts of the package in my speech. At the very least, when speaking about the effect of the Bill, it is important that the hon. Gentleman should choose his words carefully.

I advert to a point on which I might have intervened earlier. The hon. Gentleman apparently assumes that, merely because the higher rate of SSP is not being uprated this year, all those who might be affected by that change are somehow losers. Whatever may lie between us, even the hon. Gentleman would have to accept that a large number of those people will not be affected because they will get back in occupational sick pay what they have not received by way of an increase in SSP. The hon. Gentleman needs to weigh some of his words and accusations more carefully.

Mr. Meacher : On the right hon. Gentleman's second point, because he could not give a precise figure for occupational sick pay cover, he cannot be sure that what he says is accurate. We do not know the number of people who will be disadvantaged by the Bill and who can rely on occupational sick pay cover. That is precisely our objection. We have good reason to believe that a large number of people will lose.

In response to the right hon. Gentleman's first point, I shall gladly change the word "Bill" to "package" if he will equally gladly admit that his justification for the figure of

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91 per cent. was inaccurate and that the figure needs to be changed. We are talking not simply of a change of word, but of a change of meaning in the background to the Bill. If the right hon. Gentleman will make that change and acknowledge the inaccuracy of what he was trying to convey, I shall gladly change one word. The right hon. Gentleman's justification for the Bill fell back on his old friend "targeting". Just as most people are suspicious when the generals talk about military intelligence--which many people regard as a contradiction in terms--when the Tories talk about social targeting, we are entitled to react with similar suspicion. The right hon. Gentleman said in his uprating statement :

"it is better for additional resources from the taxpayer to be concentrated more clearly on those least likely to have occupational provision, or in other areas of social security for which employers cannot be expected to provide."--[ Official Report , 24 October 1990 ; Vol. 178, c. 349.]

As so often happens when the Tories talk about targeting, the effect will be the opposite of what they predict. Instead of concentrating more resources on workers least likely to have occupational sick pay provision, the Bill will increase discrimination against the potentially sick and the disabled at the point of recruitment. That is a key point. The net effect of the changes will be to increase the net cost to employers in general if an employee falls sick. Obviously, employers will be all the more wary of recruiting anyone whom they feel, whether rightly or wrongly, may become ill or who may be more frequently ill than the average. There is already clear evidence of that, and it shows what the effect of the Bill will be. A study carried out for the Spastics Society entitled "An equal chance for disabled people?" found systematic evidence of the most blatant discrimination by employers. There is other evidence to show that the right hon. Gentleman is wrong to claim that the Bill will target more aid on those most in need. A substantial number of workers are not covered by occupational sick pay schemes, and they are most likely to be the low paid, part-time workers, or low-grade manual workers. That is also the group that is most vulnerable to abuse by employers trying to evade their legal obligations under the SSP schemes. That was revealed by a report published in 1986, which drew on the experience of citizens advice bureaux throughout the country. It concluded :

"There have been clear instances of deliberate employer abuse of the responsibility to administer SSP. Employees have been told that their firm does not operate SSP, and have been pressurised into becoming self- employed, unemployed, or waiving their right to SSP. There have also been cases of employees being refused statutory sick pay outright, having their medical evidence of incapacity rejected, or simply being dismissed so that the employer can avoid payment." The right hon. Gentleman said earlier that the SSP scheme was firmly bedded in, and that that justified the further changes being made. The report, in 1986--admittedly that is four years ago, but I doubt whether all the problems have been resolved--says that, far from being bedded in, it is still working improperly.

Mr. Alexander : The hon. Gentleman's allegations are serious and they need to be considered seriously. Does he have information about where those instances happened, and does he know whether complaints were made at the time that sick pay was refused?

Mr. Meacher : I was quoting a survey by the National Association of Citizens Advice Bureaux, which I regard as an extremely reputable organisation. It is supported on

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both sides of the House. It engages in very thorough

investigations. It has 900 or more offices throughout the country and it systematically collects data from those who come to its bureaux for assistance. The people who work for that organisation are well trained, and in considerable detail. I know that, because my daughter is one of them. The bureaux do not accept reports or anecdotes at second hand. A NACAB report can be relied upon and must be accepted as true.

I shall cite three typical examples from the report. The first reads :

"Mrs. J. works for a private employer. She was not told about the procedure for claiming statutory sick pay. Her employer has now refused to pay her statutory sick pay because she had not notified him within seven days."

That is one example of an improper and, I suspect, illegal response by an employer.

The second example is :

"Mrs. N. is an embassy worker earning above the national insurance lower earnings limit and in full-time work. She has been off sick for three weeks and her employers had advised her that she was not entitled to statutory sick pay or any sickness pay from them." In fact, the rights office advised the woman to take up the matter with her employers, and statutory sick pay was then paid. However, we must ask how many cases of that sort of response from an employer do not lead to people seeking advice from the rights office and having the matter put right.

The third example is :

"Mr. I. was employed as a driver for a small firm. He earned less than £80 for a 45-hour working week. His employer refused to pay holiday pay and no sick pay scheme is in operation. When Mr. I had been off sick for four days, his employer dismissed him."

When the right hon. Gentleman seeks to justify the Bill by saying that he is targeting the low paid, perhaps we should take him at his word because it is the low paid who will be the victims of the Bill. The right hon. Gentleman is right on one point. It is ironic that he may be correct in saying that statutory sick pay rates bear little relation to the amount that workers receive, because millions of low-paid workers are getting nothing.

The right hon. Gentleman did no better with his third and last rationale for the Bill. It is a matter of greater concern to Tory Members than to Opposition Members that employers will be compensated for reduced state reimbursement through offsetting reductions in the rate of employers' national insurance contributions. He offered no rationale for reducing state reimbursement to employers from 100 per cent. to 80 per cent. I do not think that there is any rationale, other than the saving to the Treasury of £180 million--a figure that will grow during the next few years.

The right hon. Gentleman also said in his uprating statement that he would reduce employers' lower and standard rate contributions, and concluded that that

"will go some considerable way in helping employers, particularly smaller employers who tend to have lower-paid employees, to meet any extra costs which might otherwise arise from the new arrangements."--[ Official Report, 24 October 1990 ; Vol. 178, c. 349-50.] The right hon. Gentleman has expanded on those remarks at considerable length today, but, as Conservative Members have said, that is not how it appears to the smaller employers. The National Federation of Self Employed and Small Businesses, in a brief that it has supplied widely throughout the House, said that it was "strongly opposed to the proposed changes."

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It gave eight reasons for that. It may be of some relief to hon. Members if I say that I intend to cite only the first two, but as they come from that source they are worth stating clearly. The first reason is :

"When statutory sick pay was first introduced in the early 1980s, the national federation won an agreement from the Government that at no time would employers be asked to foot any of the statutory sick pay payments. With this new measure the same Government have broken that new agreement"--

and the federation adds in capital letters--

"WITHOUT CONSULTATION."

It is not often that I agree with Conservative Members, but the employers are wholly correct about that. From 1979 to 1981, the Government made a series of different proposals to statutory sick pay, giving less than 100 per cent. compensation to employers. Each of those proposals was unsatisfactory, and was heavily and intensely lobbied against by the employers' organisations. As a result, on 15 October 1981, the right hon. Gentleman's predecessor as Secretary of State announced at the Tory party conference that the Government would provide 100 per cent. compensation, despite their previous opposition to doing so.

That situation has prevailed until now, and--not

surprisingly--employers are angry with the Government for reneging on the agreement, and without consulting the relevant parties. Fortunately for the Secretary of State, he does not have to stand for re-election either by social security claimants or employers. Even the gerrymandered rules of the Tory leadership election would not save the right hon. Gentleman from either of those factions venting their spleen.

The second reason of the National Federation of Self Employed and Small Businesses for opposing the Bill is that it sees

"this measure as the thin end of the wedge. If reimbursement is 80 per cent. this year, then once the precedent is set, Government will find it easier to move to 60 per cent. next year and 40 per cent. the year after until employers foot the whole SSP payment. The same thing happened on redundancy rebates."

The same progressive rundown occurred also in the Exchequer contribution to the national insurance fund, from 18 per cent. to nothing. So there are certainly precedents for the Government's current action.

As this is the Second Reading of the Bill and we are examining its full implications, perhaps the Secretary of State can say what are the Government's intentions for a progressive reduction in the reimbursement made to employers.

Mr. Newton : The answer is simple, and the hon. Gentleman could have guessed it for himself. We have no plans to make further changes, but given the way that matters have been developing and the continuing need to examine priorities across the whole spectrum of social security, it seems sensible to have a provision that is capable of being changed. However, there is no plan to make any further change. There is no drawer in my desk containing papers with figures pencilled in for future years. Nevertheless, I will not rule out further consideration of that aspect. It would be foolish for either me or the hon. Gentleman to do so.

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Mr. Meacher : Without the right hon. Gentleman admitting that the Government have such an intention, he could not really have gone further.

Mr. Newton : A large part of the social security system, including nearly all the rates of benefit--quite apart from the whole range of other rules--is in a form that does not lock it into primary legislation, so that changes can be made by secondary legislation. Governments of all complexions have acknowledged that that is a sensible way of dealing with social security matters. I say no more than that. I hope that the hon. Gentleman will not try to build some vast, elaborate edifice out of the normal arrangement for dealing with social security matters.

Mr. Meacher : The right hon. Gentleman again chose his words very carefully, for which I do not blame him, and took great pains not to rule out further changes. He says only that he does not have any plans to make such changes. I recall the right hon. Member for Sutton Coldfield (Sir N. Fowler) saying once that he had no plans to make fundamental changes to the pensions system, but a couple of years later he brought forward a proposal that would almost have ended the state earnings-related pension scheme. Such is the lack of credibility that one can attach to Ministers' statements. Of course, the right hon. Gentleman does not have something hidden in the drawer of his desk, but I am sure that his officials and civil servants will not reveal to him the next stage of their plan until the Bill has been passed. It is clear that the Government have every intention of reducing reimbursement below 80 per cent. and probably quite soon.

The federation makes its threat pretty clear : that if the Bill "goes through, employers will look very closely at the people they employ. The health record will be a prime decider in choosing an employee."

That is an extremely revealing sentence. The employers say that if the Bill passes into law, they will be extremely careful about who they employ, and will make their decisions on the basis of an applicant's health record. Anyone with a poor health record or a poor prognosis of good health for the future will be unlikely to get a job.

Mr. James Cran (Beverley) : Will the hon. Gentleman take it from me, as one who has been closely involved in industrial representations, that it is not unknown for representative bodies to make relatively extravagant claims about the likely effect of proposed legislation, in order to influence the Government in a very small way? Does the hon. Gentleman concede that extravagant claims have been made in the past by almost every representative body one can think of, and that that will continue to happen? Does not the hon. Gentleman know the difference between such representations and common sense?

Mr. Meacher : The hon. Gentleman clearly speaks from experience. When he says that the representations that he made to the Government on behalf of the northern region's Confederation of British Industry should not have been taken at face value because they somewhat dishonestly exaggerated a point in order to influence Government policy, he is letting the cat out of the bag in a big way.

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Dr. John G. Blackburn (Dudley, West) : Will the hon. Member for Oldham, West (Mr. Meacher) confirm the date of the representations to which he refers?

Mr. Meacher : The federation's representations are date-stamped 15 November, which is 11 days ago. Unless the hon. Gentleman is suggesting that the federation has changed its mind, which I doubt, we can assume that they represent the current view of small employers.

The effects of the Bill on prospective employees who have poor health records could hardly be plainer or more worrying. It is no comfort to hear the Secretary of State keep repeating that he will reduce employers' national insurance contributions by one quarter of 1 per cent. The effect could be exaggerated for many small employers if they were confronted by a statutory sick pay payment for up to a maximum of 28 weeks. The National Farmers Union, whose members are probably the largest employers of low-paid workers in the country, stated in a submission dated 14 November :

"The combination of these changes will increase employers' costs for sickness payments by £26.50 per week for employees earning between £125 and £174.99 per week and by £19.90 per week for employees earning £175 or more. These are very significant additional costs for many hard pressed small employers, and they will only be partially offset by the proposed small reductions in National Insurance contributions."

The right hon. Gentleman appears to take a different view, but I quoted the National Farmers Union view, and I look to it for a serious examination of these proposals.

The right hon. Gentleman has achieved a remarkable feat today by creating a unanimous front against the Bill. He has even achieved a situation in which the employers are arguing the case for national insurance--I really did not think that that was possible. If I may quote the National Federation of Self Employed and Small Businesses for the last time, it said that most

"of Britain's businesses employ less than 20 people, and do not have the resources to take on their employees health insurance, that is why national insurance was first introduced."

It is certainly ironic that the Government have chosen to effect this latest erosion of accepted national insurance principles, and to impose a further financial burden of up to £11 or more a week for a maximum of 28 weeks, at the very time when there is an accelerating recession and small businesses are going down like ninepins. The Bill clearly signals the Government's intention to allow this vital area of social security provision to be removed from the state sector and to be left entirely to the discretion of

employers--Opposition Members would say that in many cases it was left to proven abuses by employers.

The right hon. Gentleman's rationale for the measure does not stand up, even to the most superficial analysis. The Bill is unanimously disliked by all the relevant parties, and it has been forced on him by the Treasury. He said that the Bill would pay for other measures, such as residential home charges. I suppose that this is the sick paying for the elderly--the poor paying for the poor. If he does not stand up to that sort of Treasury attack, he should not hold that post. There has been much discrimination by the Government in favour of the rich, and it is quite wrong for the right hon. Gentleman to talk about priorities and to make the poor pay for other benefits for the poor. If he either will not or cannot stand up to the Treasury, we shall certainly stand up to it in the Lobby tonight.

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5.52 pm

Mr. Patrick Nicholls (Teignbridge) : When my right hon. Friend the Secretary of State opened the debate some one and a half hours ago, he pointed out that the Bill is extremely short and for that reason he felt that it should be commended. I agree entirely with my right hon. Friend. The Bill is refreshingly short, and as such compares very favourably with other Bills with which I have recently been involved. Given my interest in social security matters, I should like to think that Bills will always be that short, but I suspect that I may be wrong.

The style demonstrated by the Department was also refreshing. My right hon. Friend made a full speech--as was necessary in such a case--yet he knows that any points of detail that might arise can at once be referred to his right hon. Friend the Minister for Social Security and Disabled People. That was splendid. Having been in his position, although in a less exalted post, I wish my right hon. Friend well, and I look forward to hearing his reply to various points of detail at the end of the debate.

The Bill deals with social security matters. One cannot begin to understand its scope without placing it in a general context. My right hon. Friend referred to the general context of the Bill and its perspective. When discussing what is clearly a valuable but also fairly modest measure, it is all too easy to forget what sort of budget we are dealing with. The social security budget approaches £63 billion a year--a truly vast sum of money. One cannot begin to get to grips with the scope of the Bill until one realises the totality of the expenditure involved. It is an extraordinary sum. A Labour Government would have been proud if it had been able to devote such resources to those who are most in need.

In case the hon. Member for Oldham, West (Mr. Meacher) is trying to work out the increase that that figure represents compared with the miserable performance of the Government in which he served as a Minister with responsibility for social security with such a lack of distinction, it amounts to about 41 per cent. in real terms, after taking account of inflation.

That is the context in which we should view the Bill, but what is its contribution? [Interruption.] The hon. Member for Birmingham, Ladywood (Ms. Short) is howling from a sedentary position as usual-- obviously one of her disconnected remarks. It will be useful to hear what she has to say later.

We cannot begin to assess the worth of the Bill unless we bear in mind its general context. I do not want to detain the House long, as I know that other hon. Members want to take part in the debate. I can see that the hon. Lady has a series of disconnected remarks that she wants to offer to the House. However, I can usefully point out a number of issues.

Dame Elaine Kellett-Bowman : I hope that my hon. Friend will make it clear that he is referring to the hon. Member for Birmingham, Ladywood (Ms. Short) and not to me, his colleague.

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