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Mr. Battle : When the House debated the introduction of the "next steps" agencies by the Treasury, the Secretary of State for Social Security was keen to distance himself from any idea that the method of providing social security would be privatised in any way. The Bill might not privatise the method, but it is a classic case of the privatisation of the provision of social security.

This measure is another example of enforced privatisation, pushing responsibility for statutory sick pay

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on to the employer. The Government are only a tiny step away from returning to the House to argue that SSP is no longer necessary because it merely duplicates private provision. That argument has been made before, when we debated pensions and the shift away from SERPS. I expect that the Government will be back to reduce the percentage reimbursement still further.

The very nature of SSP is being changed from a state benefit to a mixture of state and employer provision. As hon. Members on both sides of the Chamber have pointed out, ultimately low-paid workers will pay the price for the Bill. The Social Security Advisory Committee pointed out that SSP is intended to replace lost earnings and performs an income maintenance function for those unable to work through sickness. That should be a basic function of the welfare state, provided by the taxation and national insurance system. It will be interesting to see whether in these new days there will be talk of collective responsibility again. We have endured 10 years in which words such as "collective", "common provision", "public", "society" and "social" have become pejorative terms and been banished from the political vocabulary. It will be interesting to discover whether the Government will start to believe again in collective responsibility. We say that the state has a collective responsibility for providing a comprehensive maintenance system for all workers, regardless of their level of pay and the nature of their work. Far from SSP being an important and vital source of income for low-paid workers who, through no fault of their own, are unable to work, under the present Government those benefits will be winnowed out and chipped away at until they provide only a minimum form of third party, fire and theft coverage--rather than be part of a comprehensive actuarial plan.

The Government claim that cover is already given by the private sector, but I invite the Secretary of State to examine who will be affected by exclusion clauses on hours and rates of pay. Guess who is excluded, as usual--part-time workers and manual grades receiving low wages.

West Yorkshire traditionally has the lowest rates of pay in the whole of the British Isles. They are even on a par with those in Northern Ireland. Leeds has 4,500 medium and small-sized firms. It does not have one large industry, such as coal and steel, nor is its employment centred on one large company. Instead, Leeds owes its prosperity to a myriad of small and medium-sized firms, many of which do not pay high wages. We have seen the shift from employment to unemployment--and, matching that, the shift from comparatively secure work to part-time, temporary and low-paid work, particularly for women.

We are seeing a further shift to means testing. The Government call it targeting, but it is just another structural step away from universal benefits. There are not many of them left. Child benefit has already been frozen to death, and we now have another quiet cut in the social security budget to save the Treasury money, with the costs passed over to employers.

I am not convinced by the Government's argument that the disabled will not be penalised and that the Bill cannot possibly contribute to positive discrimination against disabled and long-term sick people. One group of poor people will again be axed from benefit so that assistance can be given to another. We have seen that happen before, with housing benefit.

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It is clear that the Bill is being squeezed through the House during an interregnum for the change of Tory leadership. We are told that the Government are changing their policies, but the Bill proves that they are not pulling back from a Thatcherist approach. The Bill demonstrates that Thatcherism remains intact and is on course. It is a further step in the Government's plans for privatisation and for making the poorest pay.

7.54 pm

Mr. Flynn : My hon. Friend referred to the interregnum, black hole or news vacuum in which we find ourselves at this moment. New benefits--and there are some--are being introduced by the Government with a great fanfare of trumpets and trombones, while they make cuts elsewhere.

I will be generous to the Secretary of State because he has been re- employed in his old job. The kindest interpretation that we can place on the right hon. Gentleman's actions is that he does not understand the basis of the report on which the Bill is founded. The Secretary of State laughs. I will not draw any conclusions from that, because I refuse to be sidetracked. Nevertheless, the right hon. Gentleman has tonight admitted his unabashed admiration for some of his own extempore words during the Second Reading debate. He quoted them with some satisfaction. However, he may find some of his other statements less admirable on reflection.

When we hit on the great misconception behind the Bill, and when we question the figure of 91 per cent., relating to the number of employers offering sick pay schemes, the Secretary of State said : "Under some schemes, some new employees may have to serve a qualification period before becoming eligible for occupational sick pay. A typical qualifying period for short-term sickness cover is three months. However, it is worth remembering that half all private-sector schemes have no exclusion clauses at all." The original IFF survey qualifies that argument :

"However, those schemes which are more likely to have exclusion clauses are the larger private establishments, (72 per cent.) and public sector organisations (67 per cent.). Thus, almost three quarters (72 per cent.) of employees working in establishments offering short-term cover are potentially affected by eligibility factors. Schemes in the finance business services sector are least likely to have any exclusion clauses."

Occupational schemes do exist, but many are far from adequate. On Second Reading, the Secretary of State said also :

"where there is a qualifying period, it would typically be about three months--perhaps, in some cases, six months".

He gave the impression that three months is the norm, but that in some instances a six-month term might apply. However, the IFF report states :

"The factor which most frequently affects employees' entitlement to short- term sick pay is length of time with the company. The qualifying period is typically between 3-12 months. It is the larger employers who are more likely to have this exemption clause. As a result, about half (50 per cent.) of the work force is potentially affected."

The Secretary of State was wrong, because a typical exclusion is not three months but between three and 12 months.

Arguing that the qualifying period should be compared with state sickness benefit, the Secretary of State said :

"where there is a qualifying period, it would typically be about three months--perhaps, in some cases six months--which is substantially less than the qualifying period for state sickness benefit."--[ Official Report, 26 November 1990 ; Vol. 181, c. 633-34.]

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That comparison is totally meaningless. State sickness benefit entitlement does not depend on length of service with a particular employer.

From day one of their employment, everyone is qualified, provided that they have enough national insurance contributions credited to them in the past two years and regardless of whether they have been working for that employer or not. A more relevant comparison would be with statutory sick pay, which is payable from day one of the period of employment, with no contribution conditions.

Those misunderstandings by the Secretary of State strike at the root of the Bill and the justification for it. I was recently speaking to a total stranger who happened to read the deliberations of the meetings of the Standing Committee that considered the Social Security Bill last year. He identified me by a label I was wearing--as we often do. He told me that he had read the proceedings on the Social Security Bill and--as a student of history--he thought that it was similar to an account of what had happened in the Reichstag in the 1930s. The Opposition are constantly attacking Bills, in good faith. We undermine the rationale of the Government's case, but we do not get a reply. We merely have the Government's steamroller, bulldozing through legislation, using the muscle of their majority. Social security legislation has followed two main trends in the past decade. That is the way that people see it. Year after year we have been copying the Americans and repeating the mistakes made by the Reagan regime. The result of all the myths that fed the Reagan mythology is that 3 million homeless people are now on the streets of America--the people whom Bush has described as "America's shame". Visitors to the most prosperous cities in the United States see--side by side with obscene riches groups of people, many of whom are mentally ill, camping out. We are progressing blindly and stupidly in that direction year after year.

The second trend is a return to the last century. We are being compelled in that direction by the falsely named No Turning Back group. Much of what has been argued in the debate would take us back to the era before 1911, when the social welfare programme started in this country for very good reasons. Perhaps we should return to the justification for our social welfare programme, which has been built up over that long period of time. We are gradually tearing it down and turning back to a cruel and unfair past.

The Bill will re-establish all the uncertainty and anxiety of sickness, made worse by the knowledge that one does not have a secure income. The Bill is mean, malicious and ill-conceived, and it hits most strongly at the people who have been short-changed by life--those who have been cheated by disability or who are daily under-rewarded with low pay. The Bill is a disgrace.

Madam Deputy Speaker (Miss Betty Boothroyd) : Will the Secretary of State make it clear that he has signified the Queen's Consent? 8.4 pm

Mr. Newton : I am glad to confirm that I have signified giving the Queen's Consent-- [Interruption.] If the hon. Member for Birmingham, Ladywood (Ms. Short) wants an explanation of the Queen's Consent, I invite the Chair

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to give it because I cannot remember it. I know that it is not lese-majeste , and that I have to do it, and I think that I have satisfied the Table that I have done so.

I am glad that I am not the speech writer for the hon. Member for Oldham, West (Mr. Meacher) but I am even more glad that I am not the speech writer for the hon. Member for Newport, West (Mr. Flynn). After I had listened to the former, I thought that it would be impossible to incorporate any more exaggeration, hyperbole and general overstatement into a speech, but then I heard the hon. Member for Newport, West, who took the biscuit.

In the interests of brevity I shall not seek to answer all the nonsense trotted out in the past few minutes. I merely observe that it is mildly ironic that--in view of the new-found European enthusiasm sometimes to be found on the Opposition Benches--on a number of occasions Opposition Members urge us to go in the direction of the more generous provisions of this kind in Europe. The remarks of the hon. Member for Newport, West about returning to the 19th century should be considered against the background that Denmark is the only European country that provides a cash benefit for sickness which is solely funded by the state, and that, of the other 11 EC countries, six provide no state subsidy and in most countries, the major payment comes from the employer.

The Low Pay Unit report, which I suspect is the source of much of the stuff that we have heard in the House in the past few days, quotes Luxembourg where employees get 100 per cent. of earnings for a year when they are sick. That is fine. Compare that rhetoric which has been used in the debate. One discovers that that benefit is paid entirely by the employer. The only state involvement is 50 per cent. of the administration costs.

Mr. Allen McKay : I am sure that the right hon. Gentleman does not wish to mislead the House. When he quotes information like that, he should also take into consideration the employees' work contracts and the salaries that they receive to make up for it.

Mr. Newton : I am also taking employers' rights here into consideration, as well as the fact that a large part of the work force is covered not only by the sort of arrangements that we are talking about tonight, but by occupational sick pay schemes. I am not going to return to that argument. I merely point out that anyone who reads the IFF report and its clear-cut conclusions about the growth in coverage of occupational sick pay schemes, would have grave reservations about some of the remarks made in the debate. I shall not return to that subject because it is largely irrelevant to the Bill, which--as is common consent between the Front Benches--does not affect the rights of any employee. No-one's entitlement to statutory sick pay will be affected by the Bill. All that will be affected is the way in which statutory sick pay is funded, and the balance between funding it by the state and by the employer--it is a change in balance.

That change, which amounts to about £250 million, is accompanied by reductions in employer national insurance contributions of broadly the same amount. Although that is not in the Bill, it is clearly associated with the argument for it. In that context, against the

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background of those figures, and the fact that no employees' rights are affected by the Bill, I reject many of the arguments put to me in the past few minutes out of hand. I reject the accusations made, and I commend the Third Reading of the Bill to the House.

Question put, That the Bill be now read the Third time : The House divided : Ayes 156, Noes 114.

Division No. 14] [8.07 pm

AYES

Adley, Robert

Alison, Rt Hon Michael

Allason, Rupert

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas

Ashby, David

Atkins, Robert

Atkinson, David

Baker, Rt Hon K. (Mole Valley)

Baker, Nicholas (Dorset N)

Beaumont-Dark, Anthony

Bellingham, Henry

Bennett, Nicholas (Pembroke)

Benyon, W.

Bevan, David Gilroy

Blackburn, Dr John G.

Boscawen, Hon Robert

Boswell, Tim

Bowden, Gerald (Dulwich)

Bowis, John

Bright, Graham

Brown, Michael (Brigg & Cl't's)

Bruce, Ian (Dorset South)

Burns, Simon

Butcher, John

Carrington, Matthew

Carttiss, Michael

Chapman, Sydney

Chope, Christopher

Churchill, Mr

Clark, Sir W. (Croydon S)

Coombs, Simon (Swindon)

Cormack, Patrick

Couchman, James

Cran, James

Curry, David

Davis, David (Boothferry)

Day, Stephen

Dunn, Bob

Eggar, Tim

Evennett, David

Favell, Tony

Field, Barry (Isle of Wight)

Fishburn, John Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Forth, Eric

Freeman, Roger

Fry, Peter

Gale, Roger

Glyn, Dr Sir Alan

Goodson-Wickes, Dr Charles

Grant, Sir Anthony (CambsSW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Gregory, Conal

Griffiths, Sir Eldon (Bury St E')

Griffiths, Peter (Portsmouth N)

Hamilton, Neil (Tatton)

Hanley, Jeremy

Hargreaves, A. (B'ham H'll Gr')

Hargreaves, Ken (Hyndburn)

Harris, David

Haselhurst, Alan

Hayhoe, Rt Hon Sir Barney

Hayward, Robert

Heathcoat-Amory, David

Hind, Kenneth

Hordern, Sir Peter

Howard, Rt Hon Michael

Howarth, G. (Cannock & B'wd)

Howell, Ralph (North Norfolk)

Hunt, David (Wirral W)

Hunt, Sir John (Ravensbourne)

Hunter, Andrew

Irvine, Michael

Jack, Michael

Janman, Tim

Jones, Gwilym (Cardiff N)

Jones, Robert B (Herts W)

Kellett-Bowman, Dame Elaine

King, Roger (B'ham N'thfield)

Knapman, Roger

Knight, Greg (Derby North)

Knight, Dame Jill (Edgbaston)

Knox, David

Lang, Ian

Lawrence, Ivan

Lennox-Boyd, Hon Mark

Lightbown, David

Lloyd, Peter (Fareham)

Lyell, Rt Hon Sir Nicholas

Maclean, David

McLoughlin, Patrick

Madel, David

Mans, Keith

Maples, John

Marshall, John (Hendon S)

Marshall, Sir Michael (Arundel)

Martin, David (Portsmouth S)

Mates, Michael

Meyer, Sir Anthony

Miller, Sir Hal

Mills, Iain

Mitchell, Andrew (Gedling)

Mitchell, Sir David

Moate, Roger

Morrison, Sir Charles

Moss, Malcolm

Neale, Gerrard

Neubert, Michael

Newton, Rt Hon Tony

Nicholson, David (Taunton)

Norris, Steve

Page, Richard

Paice, James

Pawsey, James

Peacock, Mrs Elizabeth

Porter, David (Waveney)

Portillo, Michael

Price, Sir David

Raffan, Keith

Raison, Rt Hon Timothy

Rhodes James, Robert

Rifkind, Rt Hon Malcolm

Roberts, Sir Wyn (Conwy)

Sackville, Hon Tom

Shaw, Sir Giles (Pudsey)

Shephard, Mrs G. (Norfolk SW)

Shepherd, Richard (Aldridge)

Smith, Tim (Beaconsfield)

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