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Ms. Short : Does the hon. Gentleman agree that, as the Government claim that the effect on companies is neutral--they will lose £250 million but get it back in another way--it is unbelievable that they would have brought in the legislation unless they intended over time continually to cut the proportion of rebate paid to employers? They could do that under the Bill without even needing an affirmative resolution of the House.
Mr. Cran : I well understand what the hon. Lady is saying but it would be uncharacteristic of me to allow myself to be dragged into agreeing with her. I do not agree, for the simple reason that I believe that this measure is relatively innocuous ; it is what might happen if the Government decide to amend it in future years that worries me. As they stand, the proposals are largely neutral, but they will not remain so if the Government keep developing the policy in the way that I fear they might.
I am moderately surprised--although I may have this wrong--that the Government did not seek representations on this point. In my simple view of life, it is always worth listening to all points of view. Sometimes they are uncomfortable, sometimes they are the opposite of what one believes, but the Government must always seek opinions. Finance directors in my constituency have told me that if the Government ask companies to spend companies' money, that must be worth representations. I agree. Why was that not done? I heard the Secretary of State say something about it, but I fear that I did not hear it all.
The companies in my constituency are worried because the principle that the Government should reimburse companies 100 per cent. has been broken. Companies pay the cost of administration, and they are perfectly happy to do so, but 100 per cent. reimbursement is necessary because the principle is that companies are not in control of sickness--they do not cause their employees' sickness. Employees become ill for a variety of reasons, usually related to medical factors, not to factors to do with the company. This measure does not recognise that some industries and establishments have higher sickness rates
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than others, again for a variety of reasons. If I have misunderstood this aspect I shall be more than delighted to be reassured of that later.It will come as no surprise to learn that what worries me is the movement from 100 per cent. to 80 per cent.--in itself relatively harmless, as I told the hon. Member for Birmingham, Ladywood (Ms. Short). Changes in national insurance contributions, worth about £250 million in 1991-92, cover it. But companies are worried about the signal that that sends about the Government's intentions. After three years in this place I have started to learn--one learns every day here--to read Bills rather more carefully. That is clearly the secret of success in this place. Clause 1(2) is a case in point. It contains a provision further to vary the 80 per cent. figure. I think that most hon. Members would accept that I am a trusting soul, but equally I can claim not to be daft, and I have an awful feeling, as do the companies in my constituency that I have consulted, that the Government cannot possibly intend to increase the percentage from 80 to 90 or 95 at some point. Again, I am happy to be corrected on that point, but it is probable that the 80 per cent. will be reduced at some stage to 60 per cent.
Perhaps this will parallel the slow death of redundancy rebates--I am sure that we all remember them.
Ms. Short indicated dissent.
Mr. Cran : The hon. Member for Ladywood nods, but I agreed with the Government about those rebates because companies cause their own redundancies, so it was perfectly logical of the Government to decide that companies should pay for them. However, as I have said, the same does not apply to sickness. The Government must recognise that. If sickness is caused by an employer, the health and safety legislation exists to prosecute the employer for it.
I have discovered that statutory sick pay will cost the Government £955 million in 1991-92, and--if I have understood it correctly, I fear that this Bill will surreptitiously and elegantly, pass this entire burden to companies in the fulness of time. We can all argue about when there will be a downturn or an upturn in the economy. However, such a bill passed over to companies will deter investment when we want to see more. It will also affect the profitability of companies and none of us would like to see that.
If my assumptions are correct, this could be a potentially heavy burden--I emphasise "potentially"--for some businesses. The Government should listen to those businesses. I have attempted to rehearse the downside of the proposals, but I have not exaggerated them. If the Government go no further than 80 per cent. I see no difficulty with the proposals. If the Government hint that they are prepared to move from 80 per cent. and ask employers to carry much more of the burden, and eventually all of it, there will be problems. I hope that I am entirely wrong. I should be delighted to be proved wrong and merely seek reassurance. I hope that I get it.
7.10 pm
Mr. John Battle (Leeds, West) : We have had two interesting and contrasting speeches from Conservative Members. The hon. Member for Dudley, West (Dr. Blackburn) gave us a panegyric, especially on behalf of the disabled, and suggested that the Bill would be celebrated
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because it marked an increase in resources. That is not the case ; the Bill spells out how much will be saved. The hon. Member for Beverley (Mr. Cran) suggested that the proposals should not be lavishly welcomed. I think he said that we should treat them as innocuous and that at present they were at best neutral. He expressed the reservation that they could be damaging in future and he referred to the clause which suggests that the contribution may be reduced even further. If the Bill receives its Second Reading perhaps he will move an amendment in Committee to delete the phrase"any greater or lesser percentage."
That phrase is ambiguous and means that the contribution could be increased or reduced in future.
We strongly argue that the thrust of the Government's policy in this short Bill is to reduce the contribution by the state and push the burden on to the employer. In the long term employees will have to pay the price for that. Conservative Members say that our claims are exaggerated. We have been here before and been accused of that. We were told that our fears about the poll tax and the uniform business rate were exaggerated. Nearly a year ago to this day there was another social security Bill dealing with the availability for work tests. We were told at that time that our fears were exaggerated.
The Minister for Social Security and Disabled People is in his place. In Committee I suggested to him that the Bill dealing with the availability for work tests would cause great hardship because when people applied for a job they would be forced to accept the lowest rate of pay on offer. The Minister will remember that when I challenged him about that he did not believe the rates of pay being offered in my constituency. He seemed to think that they were much nearer the national average of £268 a week. However, in some jobs people were paid about £1 an hour. I seem to remember that he checked the figures. The effects of that Bill are precisely as we predicted. As unemployment rises in my constituency wage rates are again dropping.
We were accused of exaggerating the reality of poverty until the figures were slipped out just before the summer recess. One of the primary causes of poverty in our society is low pay, and we should read the Bill in that context. The explanatory and financial memorandum to the Bill makes the savings plain. It states : "Clause 1 will produce savings in public expenditure of £181m in 1991-92, rising to £190m in 1992-93 and £197m in 1993-94." The word "savings" is a Government euphemism for cuts in public expenditure. Clause 1 will reduce from 100 to 80 per cent. the statutory sick pay that employers can recover from their remittances of national insurance contributions.
This is the second year running that the Government have reduced statutory sick pay for low-paid workers--last year it was by £80 million. As a result, 4.9 million workers lost their entire entitlement to the higher rate of statutory sick pay. That is one in five of the work force. When the changes in the Bill are combined with the decision in October's uprating statement to raise the threshold for the lower rate of statutory sick pay from its current level of £125 to £185 and the proposal to freeze the higher rate at its current level of £52.50, they will bring to the Treasury a saving of a further £100 million.
In the uprating statement, the Secretary of State called this "restructuring". In moving the Second Reading of the
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present Bill, he used that word again. When we in areas such as Leeds which have depended on a manufacturing base hear such a word, it suggests cuts, reductions and redundancies in the work force. "Restructuring" is a euphemism for cuts.Perhaps the Secretary of State had to find from somewhere the money for the token increase in child benefit for the first born. It has been taken from statutory sick pay. The Bill is about withdrawing the role of the state. The Government are ambiguous about that and are not quite clear where they stand. They ask whether the state should have a role or whether it should be pushed back to the employer and the employee. That is the thrust of the Bill. They are again pushing forward the make-the-people-pay principle-- make them pay 20 per cent. minimum of the poll tax ; make them pay at least 20 per cent. of their housing benefit. Now the Government want to make the employers pay 20 per cent. of statutory sick pay.
The impact of this so-called restructuring on employees was spelt out in a reply in Hansard on 12 November. According to the Government, about 3 million employees with earnings of between £125 and £185 a week will be pushed down to the lower rate of statutory sick pay. They will no longer be eligible for the higher rate. A wage of £125 is well below the Council of Europe's decency threshold of £178.91 a week. Will Conservative Members, with their great new approach to Europe under a new leader, acknowledge that Council of Europe threshold? In the meantime, people who fall sick on or after 6 April next year will be pushed to the lower rate if their wages are within that bracket. In practice they will lose £9 a week. The failure to raise the higher rate will result in a loss of £5.70 a week for those earning £175 or more. As we know, it is estimated that 60 per cent. of such people are women. The Government make much of the fact that families need to have two earners, and we have had debates about it. A woman who works to provide a much-needed second income to pay the family's poll tax or to make up for the reduction in child benefit and who is not covered, will be subjected to means testing. If the husband is working she can apply for income support, but she has no chance of getting it. There will be no cover for the income that is lost. The Government cannot deny that such families will suffer a loss of income.
Those earning below £46 a week are unable to claim statutory sick pay. When people face a shift not simply from employment to unemployment but from relatively secure work to temporary, part-time and low-paid work, the impact of the Bill will be greater than the Government are letting on. People with disabilities are more likely to be working part time and in lower-graded occupations. They are also the ones most likely to be excluded from the private schemes and so dependent entirely on the state scheme. As soon as the Bill passes through the House, it will lead to further withdrawal of state responsibility, with a resulting increase in hardship and insecurity for the most vulnerable people in work. It will force disabled people to work for low wages. Others will stand to lose their long -term incapacity benefit.
Employers will face an increase in administration costs on top of the uniform business rate, high interest rates and the rest. If the Bill goes through, it will encourage
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discrimination against those with severe disabilities,and employers will stop recruiting them. Too few of them are already employed, so how will the Bill give employers incentives to be more progressive in employing people with disabilities? It will encourage employers to go in the opposite direction.Conservative Members say that the National Federation of Self Employed and Small Businesses is exaggerating, but I notice that it has said that it opposes the Bill not least on the ground that the Government broke an agreement about consulting it. That should have taken place before Second Reading. Furthermore, the federation said :
"96 per cent. of British 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." I suspect that that is why the Government are trying to slip out of the system of national insurance. They are trying to privatise the state benefit provision. This is back-door privatisation of the welfare state.
The Government try to justify what they are doing on the basis of the report commissioned by the DSS. They claim that it shows that the vast majority of workers are covered by private occupational schemes. However, the detail of the report shows that 44 per cent. of all private sector firms and 55 per cent. of firms with fewer than 10 employees, which accounts for 75 per cent. of firms, have no scheme. Does that show that 91 per cent. of employees are covered by private schemes?
Furthermore, even in firms where some occupational scheme exists, coverage is far from universal because the employees most commonly affected by exclusion clauses are those working part time in the lower grades and on low wages. Nearly one in two schemes have exclusion clauses relating to the length of service and the hours of work. In other words, 72 per cent. of employees may be affected by those exclusions, so they have extremely limited coverage. Beveridge wanted the national insurance scheme to provide a fully comprehensive scheme from the cradle to the grave, based on the actuarial principle that people paid in contributions and then got help when they needed it in difficult circumstances. The Government have moved away from that fully comprehensive principle and are trying to enforce on the people a back-door, third party fire and theft coverage, on the basis that the personal premium is the absolute minimum. If one cannot afford the full premium because one is sick or ill--the reason why the system was invented in the first place--one will not get full coverage. We cannot treat people in the labour market like second-hand cars, providing the minimum legal assistance for those likely to break down. What is worse is that, if it is not their fault, they stand to lose out altogether. There is a group in the Lobby at the moment--the No Turning Back group--which is looking for a champion to defend Thatcherism. The fact that the main architect has been deposed means that there is a danger of the whole project going. That project was spelt out in September in a pamphlet published by the group. A chapter headed "The Withering Away of the State"- -says :
"Our purpose should be to wean people off welfare. We advocate the systematic reform of the welfare system into one based on insurance--run on a private agency system It should be a privately managed insurance-based system giving people maximum protection and opportunity Nothing in our proposals would affect the benefits paid as of right to disabled people."
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The group is obviously a little sensitive about disabled people, but the system and principles are clear. It would dismantle the whole of the welfare state and make people take out private insurance to cover the times when they lose their jobs or are struck down by illness.At the heart of the Bill, and of the clause to which the hon. Member for Beverley referred, is democracy. When the hon. Member spoke about the potential in the Bill for changing the system to make it even harsher, and reducing the contributions even further from 80 per cent. he did not spell out the way in which the legislation will be changed. The Secretary of State will have the power to alter the percentage rate without a proper parliamentary debate. It is all right for the Secretary of State to say that there has been a shift from affirmative to negative orders. The Bill is paving the way for future detailed reductions in the level of state reimbursement for employees, which can be passed without proper parliamentary scrutiny.
The Bill is a clear signal that the Government are intent on their project of withdrawing from state provision and of dismantling the welfare state. It is not good enough that they have taken money from the poor and redistributed it to the rich. The principles of the national insurance scheme and the welfare state have been fundamentally undermined. Conservative Members may claim that I am exaggerating, but I refer them to what happened when we debated the poll tax, the availability for work test and the poverty figures that Conservative Members denied for months.
This time, it will not be good enough for the Secretary of State to offer, in answer to questions from his hon. Friends, a fundamental review. Three people out in the Lobby are offering fundamental review of the poll tax, but it is too late for that because millions of people have paid the price. Before millions of people pay the price for this Bill, I urge the House to reject it and make the Government change track.
7.28 pm
Mr. Peter Thurnham (Bolton, North-East) : The hon. Member for Leeds, West (Mr. Battle) is worried about the No Turning Back group, but from his speech, it is obvious that he is a member of the no turning forward group. I recommend that he reads The Independent of today, which has on page 3 an article headed :
"Kinnock seen as liability by colleagues".
Until the Labour party gets round to having a leadership election, it is condemned to being a no turning forward group.
The hon. Gentleman's speech was entirely in favour of the nanny state. He said that he was concerned about withdrawal of state responsibility, and he said that without any regard to the fact that people want to have some responsibility for their lives. Employers want to accept more responsibility for their employees. Many more people are self-employed now than there ever were when the Labour party was in office. That is because people want to accept that responsibility. The hon. Gentleman should not condemn people for wanting to do that, but he seems to think that they have to turn to the state for their care because they cannot provide for themselves. He is mistaken to look at it in that way. People want to have more responsibility in their hands and do not want to have to depend on the state to anything like the extent that they had to in the past.
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The hon. Gentleman talked about cuts in public expenditure, but there have been enormous increases to £200 billion. He talked about cuts in the work force, but there are 27.5 million people in work. How can he talk about cuts when a record number of people are in work?Mr. Battle : Does the hon. Gentleman accept that the increase in the work force reflects an increase in part-time, temporary and low-paid work? That is the reason why the Government claim that the employment market has increased. In reality, it is not an increase. Unemployment is rising.
Mr. Thurnham : The hon. Gentleman said that the primary cause of poverty is low pay, but he is wrong. The worst cause of poverty is unemployment. Only the Labour party would prefer people to be unemployed rather than in part-time work if they want to take it. The hon. Gentleman should not condemn people if they want part-time work. People from days of old would probably think that most people now are in part-time work as they work only 40 hours a week. Circumstances change. The hon. Gentleman should look ahead and not imagine that everything is as it was when the Labour party was in power.
Mr. Andrew Rowe (Mid-Kent) : Does my hon. Friend agree that probably the commonest pattern for women with children returning to the work force is that they choose to work a certain number of hours while their children are small, gradually increasing those hours as their children become more self-sufficient, until eventually they are extremely well placed to take a full-time job?
Mr. Thurnham : I could not agree more. One should look at part-time jobs as a way to help people to move into full-time jobs if that is what they are looking for.
I apologise for having missed part of the debate. I am sorry, but I had to leave the Chamber briefly to attend a meeting of the group Exodus, which campaigns for mentally handicapped children to move out of institutional mental hospitals into the community. The thrust of the Bill is about facing up to priorities and reallocating resources where needs are greatest, and that is an example of the way in which one wishes resources to be reallocated.
Ms. Short : I want to take the hon. Gentleman back to when protection for low-paid workers was being reduced. He said that unemployment was the worst possible cause of poverty for anyone. We are going into a period of rising unemployment. Does the hon. Gentleman stand by his statement that, rather than having unemployment, it would be better if Britain were one great big sweatshop, with low pay for virtually everyone?
Mr. Thurnham : If the hon. Lady looks at my speeches, she will see that I spoke about the country being a wealth shop. We should be concerned about the creation of wealth. Only Labour Members would rather that people were out of work than in work. Most people would prefer to be in work and creating wealth rather than out of work. I refer the hon. Lady to my speeches on that subject if she wants to see what I have said. She pressed my right hon. Friend the Secretary of State about the number of people who were included in schemes, rather than merely working for employers who had schemes. That is a spurious line to follow.
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Mr. Quentin Davies (Stamford and Spalding) : On the vital matter of unemployment, is my hon. Friend aware that the Labour party has come out with a proposal for a statutory minimum wage? That would inevitably knock many people out of jobs and increase unemployment to a higher level than it might otherwise have been. Is my hon. Friend aware that, according to some calculations, 750,000 people would be needlessly thrown out of their jobs by that pernicious proposal?Mr. Thurnham : That is typical of what the Opposition say without paying proper attention to what will happen. I refer them to the time when Barbara Castle, now Lady Castle, was Secretary of State for Employment and Productivity. She looked into the matter and produced a report saying that that proposal would lead to massive unemployment, particularly in the regions and Northern Ireland.
Mr. Tony Banks (Newham, North-West) : Will the hon. Gentleman explain why this country, alone of all the EEC countries, does not have minumum wage provisions or standards? Why can the Germans, French and Italians all believe that it is possible to have minimum wage provisions, but this country cannot? If this country were much more successful than all the rest, I could understand it, but as Britain is undoubtedly the sick man of Europe in economic terms, obviously the hon. Gentleman's argument does not bear examination.
Mr. Thurnham : Britain was the sick man of Europe when the Labour party was in power. It is no longer the sick man of Europe because we do not have legislation that stops people working. The legislation about which the hon. Gentleman spoke would stop people working. It is not really applied in those other countries anyway--it is only a fiction--because it stops people working. Only the Labour party wants to put people out of work. I see it as a progression--if people can start at a low rate, they can progress up the ladder. If we stop them starting at that lower rate, we stop them proceeding up the ladder. The hon. Member for Birmingham, Ladywood (Ms. Short) asked in an intervention in the speech by my right hon. Friend the Secretary of State how many employees were included in schemes, rather than merely employed by firms that provided the cover of a scheme. That is a spurious question. It is illusory. The question cannot be answered in the terms that the hon. Lady wants. New employees are not usually covered by those schemes. A period of three, six or perhaps 12 months must elapse before such people can qualify. Part-time employees are generally excluded--they may be employed by more than one employer. Most of all, the hon. Lady's question does not stand up because private firms generally use discretion. I declare an interest in that I am a small employer. I am concerned about the Bill and the effect on small employers. The difference between private and public employers is that private employers use their discretion and, where they can see that they should help their employees through a period of sickness, they will generally do so. Only in the public sector and in the local authorities mentioned in the report by the Audit Commission--which the Labour party wants to abolish-- are there automatic "free days" when one does not need a sickness certificate. Private firms do not go in for that. They judge each case on its merits, as they should.
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Mr. Eric Martlew (Carlisle) : The hon. Gentleman's comments amuse me a little. For more than 20 years, I worked for a private company, which obviously was not like the firm owned by the hon. Gentleman. It did not look at an individual to see whether he had blue eyes in order to decide whether to give him sick pay. My firm negotiated sick pay conditions with the employees and the trade unions, and sick pay was a right for all employees. The hon. Gentleman advocates giving sick pay to the deserving sick, like the policy of giving to the deserving poor. Sick pay is not about charity. It is about entitlements in a civilised country.
Mr. Thurnham : We want to work towards a society in which there is greater responsibility--more individuals are able to accept responsibility and more employers are able to accept responsibility for their employees. We now have 3 million people who are self-employed and who obviously accept that responsibility. In a recent article in The Sunday Times, the Chancellor of the Exchequer, my right hon. Friend the Member for Huntingdon (Mr. Major)--who may soon be leader of the Conservative party--listed the factors by which he judged new proposals. He said that he asked himself six questions about any proposed legislative change : " Would it enlarge freedom and extend opportunity?
Would it make producers and providers more accountable and responsive to consumers?
Would it encourage people to take more responsibility for their own lives?
Would it improve life for the worst-off in society?
Would its effects be environmentally sound?
Would it enable individuals to make the maximum contribution to society?"
The Bill stands up well by those yardsticks.
Mr. Thurnham : Yes, it does. It encourages people to be more responsible and helps to allocate resources where the need is greatest.
The Bill's costs have been explained to us. There will be a movement from 100 per cent. to 80 per cent., which will cost employers £250 million. That will be offset by the reduction in national insurance contributions, which my right hon. Friend the Secretary of State said would come close to £250 million. The major change is the £100 million saved by freezing the higher rate of statutory sick pay and raising the threshold. About £100 million is available because of the change.
The change affects those with the higher band of incomes, not those with the lower band of incomes. The Opposition say, wrongly, that it affects people on the lower incomes. However, it makes money available for distribution in areas where the need is greatest. My right hon. Friend the Minister for Social Security and Disabled People is responsible for the independent living fund, which now costs more than £60 million. That is an example of where resources are being reallocated. We must establish priorities and then decide where the need is greatest.
The Opposition are always quick to condemn the Government for doing too little too late, for being mean, and so on. The Government have introduced a Bill that shows where resources can be made available. There must be some limit on resourses. Even if the Opposition were in Government, they would have to accept a limit on
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resources. It is a question of how those resources are allocated, and the Bill is effective in the way in which it tackles that. Mr. Battle rose --Mr. Thurnham : We are having quite a lively debate.
Mr. Battle : Does the hon. Gentleman seriously believe that £175 a week is a high wage? How does he contrast that with the tax benefits in recent Budgets for people earning more than £2,000 a week?
Mr. Thurnham : We are talking about different bands. The figure that the hon. Gentleman mentioned relates to the higher band. The Bill fully protects those in the lower bands from inflation. The £100 million available because of the changes comes from the higher band--mainly people in firms that have occupational schemes. Cover is provided for the vast majority of employees either through occupational schemes or through the discretion of the employer. The hon. Gentleman is wrong.
The Government should be commended for introducing the Bill. Any change usually results in those who think that they might be losers making loud protests, whereas in general the gainers are either unaware that they are gainers or they tend to remain silent. There have been protests from the small business lobby, half a protest from the big business lobby--on whose behalf my hon. Friend the Member for Beverley (Mr. Cran) spoke--and the disability lobby has expressed concern. They are confused about the impact of the Bill. They should recognise that, within the whole balance of priorities, there are benefits.
Hon. Members on both sides of the House share a genuine concern for the disabled and for those in society who cannot look after themselves ; but I am concerned that some people who are not ill take advantage of the £1,000 million a year statutory sick pay. I refer Opposition Members to the Audit Commission's report. The hon. Member for Newport, West (Mr. Flynn) said that the report did not refer to the generality of authorities, only to the London authorities. It is clear that he did not read the report. The very first exhibit refers to all districts. It shows that sickness levels in all local authority direct labour organisations are above the CBI's average national figure. The averages for the shire districts, the metropolitan districts and the London boroughs are all above the national average.
Ms. Short : The hon. Gentleman is making a serious and dangerous point. We all agree that it is wrong when people pretend to be sick, and there should be a tightening of the rules wherever that is happening. However, if the hon. Gentleman is using that to justify cutting the sick pay of low-paid workers who are genuinely sick, that is inexcusable.
Mr. Thurnham : I share the hon. Lady's concern, but it is clear from the report that there are cases of non-genuine sickness. It gives considerable detail of the causes of the problem, including institutionalised sickness that is not genuine sickness. It suggests that there is a lack of proper management. The Bill is good because it brings more responsibility to bear on individual employers, so that if they have higher than average levels of sickness, they have greater reason to question why. I recommend the report, which is very good, to the hon. Lady. It lists many factors
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that can lead to higher than average sickness rates. It is not simply because the employees are not healthy ; it is because the management systems are not adequate.Mr. Rowe : Somewhat to my embarrassment, I must confess that I have not read the report. I was a civil servant many years ago, and it was commonplace to hear people say, "I have sick leave due to me." Perhaps that is what the report is highlighting.
Mr. Thurnham : My hon. Friend has put his finger on an important point.
Paragraph 55 of the report states that one of the authorities had 12 days uncertificated sickness absence built into its computer printouts as free days. If someone does not take all of those days, no doubt he is asked why. It is an example of where the greater responsibility that is built into the Bill will bring home to all those employed in an organisation the real causes of sickness levels. Is it because employees are generally unhealthy- -
Mr. Martlew : When the Government introduced statutory sick pay, they also introduced self-certification. Is the hon. Gentleman admitting that that legislation has been a flop and has increased the number of days lost through sickness?
Mr. Thurnham : I understand that largely the legislation is working very well. Employees can self-certificate for periods up to six days. I suspect that the legislation is working differently in private industry from in the public sector. I refer the hon. Gentleman to the report. My right hon. Friend the Secretary of State, the Opposition and all sides of industry agree that the legislation has worked well since it was introduced, although I do not think that it is working that well in areas of the public sector.
I recommend that the hon. Gentleman reads the report, which lists ways to study the matter, sets target levels for acceptable degress of sickness, and sets trigger levels that would automatically instigate management investigation. It gives a list of key success factors that will enable authorities to study practices in their organisations. For the most part, local authorities have a good reputation as caring employers, and I am sure that they would not wish to lose that. However, there is evidence that in London and in a number of other authorities--such as my authority of Bolton --sickness is above the average rate for industry. That suggests that not all the reported absences can be due to genuine incapacity.
The report states that it is clear that much can be done to reduce the current high levels of sickness absence without introducing burdensome terms and conditions. Many of the authorities reviewed in the report have already implemented recommendations and are now benefiting from the improvements. That demonstrates how a more responsible attitude to sickness can be to the benefit of everyone in industry, and especially to those who are most deserving of the help that we can give them. I commend the Bill to the House.
7.47 pm
Mrs. Alice Mahon (Halifax) : It is ironic that the last Bill to come before the House for its Second Reading under a woman Prime Minister should be one that will have such a bad effect on women. As my hon. Friend the Member for
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Oldham, West (Mr. Meacher) said, it is a squalid memorial to Thatcher's reign. She might be a woman, but she is certainly no sister.It is legitimate to ask the three contenders for the Tory crown who are now grubbing about in the Lobbies what they think about the Bill and what they will say in 12 months' time if it has the bad effects that we expect. They have all stated their credentials for the job that they all want. They have all claimed a common touch--the class warrior, the potato planter and the weightlifter. I should be interested to know whether, in a few years' time, the right hon. Member for Henley (Mr. Heseltine) will deny thrice before the cock crows that he had supported the Bill. I shall be interested to know what Lobby he votes in tonight.
The Secretary of State appeared reluctant to accept the reality that low- paid workers in non-unionised workplaces often have difficulty in obtaining statutory sick pay, and there is plenty of evidence of that. The Low Pay Unit has clearly stated the effect of the Bill on women. Female employees having earnings between £125 and £175, and part-time workers-- many of whom are excluded from occupational sick pay schemes--will be badly hit by the Bill's provisions.
It is no use the Secretary of State making spurious arguments to the effect that small businesses do not really mean what they say. There is plenty of evidence of opposition to the Bill, if only the Government will listen. The National Association of Citizens Advice Bureaux undertook a survey of employers who do not provide statutory sick pay, but obviously the Government do not want to hear that evidence.
There can be dire consequences for employees who are dismissed because of sickness. They not only risk immediate hardship, but will lose entitlement to unemployment benefits for six months if they cannot prove unfair dismissal if they qualify under the two-year rule. The Government had access to NACAB's reports on SSP, low pay and poor working conditions, but have ignored them.
One citizens advice bureau in Hertfordshire reported seven cases in one month of employers refusing to pay SSP to eligible workers. There is a great deal of evidence that employers cheat on that benefit. The National Federation of Self Employed and Small Businesses is strongly opposed to the Bill, and rightly accuses the Government of reneging on their earlier promises. The Secretary of State let the cat out of the bag tonight when he was questioned by my hon. Friend the Member for Oldham, West (Mr. Meacher), and refused to reveal the Government's intentions in respect of the future level of reimbursement to employers. The right hon. Gentleman had an opportunity to tell the House what he is about, but refused to take it.
My hon. Friend the Member for Leeds, West (Mr. Battle) is right when he says that the Government's long-term intention is to privatise the scheme and to rid themselves of what they see as a burden, as they go about breaking up the welfare state. The hon. Member for Beverley (Mr. Cran) asked the Secretary of State for a nod and a wink, but he will be bitterly disappointed. We have heard all that we are to hear tonight.
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Many other organisations oppose the Bill. If the polls being taken in the Lobby tonight are any indication, we shall see another Prime Minister in the Thatcher mould at the Dispatch Box next week. The Government always refuse to listen and are totally inflexible, whatever the Opposition's arguments may be. Many basic workers' rights have been lost under the present Government. They include maternity benefits, the right to work, action against unfair dismissal, wage protection for young people, benefits for short-time working, and health and safety protection in many areas.In my own constituency, workers at the Coloroll group were left without protection when it went into receivership. Loyal, long-service workers who were entitled to 12 weeks' notice were unable to claim until that period of notice expired. If they are lucky enough to find work earlier than that-- after a month, say--they receive only one month's redundancy pay, and none of the extra severance pay negotiated by their union. The receiver has a duty only to the company's shareholders, and they are his first consideration. That unfortunate group of workers cannot even get their holiday pay. It is scandalous that such a thing should happen to decent people. The hon. Member for Bolton, North-East (Mr. Thurnham) referred to low pay. Last week, I went to the Halifax jobcentre to see what work was on offer there for textile workers. There were only four textile jobs advertised, and they were all in other areas other than Calderdale. One of the vacancies was for a Volkman twister machine operator, at £99.79 for a 40-hour week. Another was for a security guard dog handler, for pay of £1.50 to £2 per hour. The third job was for a quality controller in a meat processing factory, at a wage of £2.30 per hour. That is what my right hon. and hon. Friends mean by low pay.
A number of workers made redundant by Coloroll have already been to see me. One 56-year-old man was in despair because it is unlikely that he will find other work--at least with a company like Coloroll. The Coloroll tragedy has nothing to do with the Bill, but it highlights what is happening in the real world and illustrates our arguments about low pay. Three hundred Coloroll workers in my constituency face a very bleak Christmas.
John Ashcroft, the high-flying managing director of Coloroll, who wreaked such havoc on the company and the community of Sowerby Bridge, was praised to the rooftops by the Prime Minister as the entrepreneur of the year. He will have a good Christmas, because he gave himself £1.2 million in dividends the year before Coloroll collapsed.
Other Community countries have protective legislation. France helps workers caught in dreadful situations such as that at Coloroll. The Bill is another attack on low-paid employees, many of whom do dirty, hazardous and boring work, and who can never save for the day when they may face ill health or an accident. I refer to the people at the bottom of the heap, about whom Conservative Members do not have a clue, but who will be penalised still further under the new legislation. It is estimated that 3 million low-paid workers will lose out under the Bill. It has been argued that employers' national insurance contributions will be lower, which will provide some compensation, but many employers will not make that connection. Whatever the Secretary of State claims, the changes will discriminate against employers whose workers fall sick.
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My hon. Friend the Member for Oldham, West quoted the clear advice of the Spastics Society that the Bill will discourage employers from taking on people who are disabled or have poor health records. The Government know that that is true. We saw a dreadful performance by the Secretary of State : he was so embarrassed by what he had to tell the House that he went on for about an hour and a quarter, but he could not cover up the fact that the disabled will be worse off. The Bill is about saving the Government money--getting rid of the existing scheme and having it privatised. It is all part of the Government's attack on the low-paid. It is like a creeping, deadly slime that is suffocating the basic rights of working people. I hope that Conservative Members will feel a twinge of conscience, and will vote against this shabby, nasty little Bill.7.58 pm
Mr. Roger King (Birmingham, Northfield) : The hon. Member for Halifax (Mrs. Mahon), who spoke with great feeling, said that the Bill is shabby, and claimed that it is another attempt to cut Government expenditure in an area of social welfare provision. She is wrong. This legislation must be seen as part and parcel of the Government's growing commitment to social welfare provision. One cannot consider it in isolation, or without taking into account the significant financial improvements announced for next year, in respect of pensions, residential care and nursing home allowances, family benefits--and in particular, as was mentioned by my hon. Friend the Member for Dudley, West (Dr. Blackburn), benefits for the disabled.
That is a major step forward in the provision of help where it is required, and we all warmly welcome that. It is targeted help. The Government appreciate that that is the only way to put increased financial resources into areas where there are known problems, so that we can tackle them more easily.
Ms. Short rose--
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