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Mr. Gummer : My right hon. Friend and I covered that point in the document before the House. I do not accept the hon. Gentleman's arguments and that is why on this ground, as on others, I have allowed the authorisations to go forward.

Mr. Harry Cohen (Leyton) : Who in the Government considered the issue of nuclear proliferation and nuclear terrorism, which arise from giving THORP the go-ahead? Why have the Government given those matters such a low weighting in their considerations? Is not the decision immensely dangerous and against national and international interests?

Mr. Gummer : This is a matter not for the Government but for my right hon. Friend and me. We reached our conclusions in a very long series of meetings, in which we sought to find the best answer and to carry out our responsibilities under the Act. We took very considerable care to consider proliferation. We have said what we thought about that in the decision letter. I take a different view from the hon. Gentleman. I have spent a great deal of time examining the matter and reaching my judgment. I hope that he will take as much time.

Mr. George Howarth (Knowsley, North) : Throughout his statement, the Secretary of State has repeatedly dodged answering questions and requests to publish the Touche Ross report by referring hon. Members to the decision itself. The decision only covers the economic case in three short pages. In the light of that, it is impossible to assess what it means. Will the Secretary of State now take a decision and tell the House that he will, in due course, publish the Touche Ross report so that people can make an informed judgment about the case and not be, as we are at the moment, left in the dark?

Mr. Gummer : It must surely be the best proof of the commercial sense of such a matter that a body wishes to proceed and that contracts are in place that make the procedure profitable. The matters that relate to the authorisation are fully covered. It is not my purpose to cover matters that do not relate to the authorisations, even though I have taken into account with my right hon. Friend the Minister of Agriculture, Fisheries and Food wider matters that are not held to be legally our responsibility.


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Northern Ireland

5.39 pm

Rev. Ian Paisley (Antrim, North) : I beg to ask leave to move the Adjournment of the House under Standing Order No. 20 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,

the situation arising in Northern Ireland as the result of the Prime Minister's signing of the joint declaration with the Prime Minister of the Irish Republic.

I am aware that all that I can do is underscore that this matter is specific, important and urgent and that I cannot go into the argument, but, because of the Prime Minister's statement and the remarks of other right hon. and hon. Members, the House is aware of the importance of the situation in Northern Ireland.

In Northern Ireland, we do not have any local authorities that can deal with matters such as this. Our local authorities empty bins, look after graveyards and deal with recreation. They do not have other powers. Therefore, it is essential that every democratic opportunity be taken by the House to air a matter of such grave importance. After all, we have been told today that this matter is going to bring peace. We have heard statements about peace in a week and peace at Christmas, but surely the House should take time to discuss the matter.

This week, we have had guillotines on important Bills. Surely, before the recess, we should have an opportunity to discuss this matter. Points of view should be argued and answers given. All hon. Members know the inadequacy of statements, and you, Madam Speaker, have called our attention to the fact that we must ask questions and not make speeches. I put this matter to the House on behalf of my constituents and the people of Northern Ireland who feel that, if all the eulogies that have been paid to the statement are true, the House should take time to discuss it, and discuss it thoroughly.

Madam Speaker : I have listened carefully to what the hon. Gentleman has said. I have to give my decision without stating any reasons. I am afraid that I do not consider that the matter which the hon. Gentleman has raised is appropriate for discussion under Standing Order No. 20. I therefore cannot submit the application to the House.


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Points of Order

5.41 pm

Mr. Terry Rooney (Bradford, North) : On a point of order, Madam Speaker. I wish to raise two aspects of written question No. 134, which appeared on yesterday's Order Paper. First, does the convention on hon. Members interfering in other hon. Members' constituencies apply to written questions ? Secondly, a written question was tabled yesterday, but, at 9 o'clock yesterday morning, the local authorities concerned received a press release from the Minister giving the answer, before the Vote Office was open and before hon. Members representing the relevant constituencies knew that the question had been tabled.

Madam Speaker : The hon. Gentleman must raise his latter point with the Minister concerned. On his first point, the hon. Member raises a matter of convention rather than a matter of order. I prefer to leave particular cases to hon. Members to resolve between themselves. In general, however, there is no doubt that it is far preferable for hon. Members to inform colleagues when they touch on events in their constituencies. That is the courteous thing to do. I should like hon. Members to continue in that way.

Dr. Robert Spink (Castle Point) : On a point of order, Madam Speaker. Are you aware that hon. Members have been challenged to use words such as "victrix" and "reverist" in the House ? Is that in order, or is it balderdash ?

Mr. Paul Flynn (Newport, West) : Further to that point of order, Madam Speaker. Three hon. Members--I have informed one of them at least-- have earned for their constituents £1,000 in goods today by using the Chamber for what I believe to be a publicity stunt for a commercial organisation. Although all hon. Members would like to do the best for their constituents, and we would all like £1,000 worth of goods to distribute, the only way in which we can do that is by giving publicity to a commercial organisation. Although that might be fairly innocent in this situation, could it not lead to other commercial organisations putting pressure on hon. Members to use the House and our powers of influence here for purely commercial ends ? Several hon. Members rose --

Madam Speaker : No, I can deal with it, thank you very much. I understand that there was some charitable element in what took place.

Mr. David Shaw (Dover) : It was a business.

Madam Speaker : Order. I am on my feet. But I cannot approve of hon. Members being incited to play games with our proceedings. [Interruption.] Order. I have not yet finished ; I am on my feet. That is what has taken place today. Nor do I approve of hon. Members agreeing to do so and that is what has happened today. I hope that there will be no more tomfoolery, because I deprecate it very greatly.

Ms Glenda Jackson (Hampstead and Highgate) : On a point of order, Madam Speaker. At 3.30 pm, a written answer from the Secretary of State for Health was placed in the Vote Office while the right hon. Lady herself was holding a press conference at Richmon


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delivery of health care in my constituency. Although I welcome the fact that the Secretary of State has decided to keep the renal unit at the Royal Free hospital, is not it disgraceful that, yet again, a Minister of the Crown has revealed changes in Government policy and funding to the press before they were detailed to the House?

Madam Speaker : I understand that that is the subject of a written answer which was made available to the House at 3.30 pm today. I understand that the Secretary of State also gave a press conference at that time. Possibly the press has picked up on an embargoed advance briefing and has breached that embargo. I deprecate such breaches, just as I deprecate any statements that are made outside the House to the media before they are made to the House.

Mr. Ian Bruce (South Dorset) : On a point of order, Madam Speaker. May I apologise to the House? I certainly did not appreciate that I was breaking the rules of the House when I mentioned that word. It is always a temptation, when not many Conservative Members have white beards, to try to play Father Christmas to our constituents.

Madam Speaker : There was no breaking of the rules of the House, but the hon. Gentleman was playing games with our proceedings. That is what I deprecate and I hope that it will never happen again.

Ms Liz Lynne (Rochdale) : I seek your guidance, Madam Speaker. Is it in order for the Parliamentary Private Secretary to the Leader of the House to seek to disrupt Back-Bench business? I thought that the Leader of the House was meant to protect Back-Bench Members. Is it in order for that Parliamentary Private Secretary to remain in his position? May I refer the matter to the Procedure Committee?

Madam Speaker : There is no appeal from one day to the next and it is up to individual hon. Members to use the Standing Orders or the procedures of the House, provided that they do so correctly.

Mr. Simon Hughes (Southwark and Bermondsey) : Further to that point of order, Madam Speaker.

Madam Speaker : I have dealt with that point of order, thank you very much. [Interruption.] I have dealt with that point of order. There is no further point of order. I know


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precisely what happened. The matter should have been dealt with right away. It is up to hon. Members to use the Standing Orders and the procedures of the House, provided that they do so correctly.

Dame Elaine Kellett-Bowman (Lancaster) : On a point of order, Madam Speaker. May I make it absolutely clear that none of that money whatsoever will go to anybody's constituency--

Madam Speaker : Order. I have dealt with that matter.

Mr. Bob Cryer (Bradford, South) : On a point of order, Madam Speaker. Notification of the two statements this afternoon did not appear on the annunciator until 10 minutes to 2. I realise that that has nothing to do with you, Madam Speaker, because you deal only with the notification of private notice questions. The provision of information at 1 o'clock is a very strong convention, to allow hon. Members to organise their afternoons so that they are present for statements. Your ruling has always been that, if hon. Members are not present for statements, they are not allowed to put questions. Therefore, it is very important that information is available at 1 o'clock so that hon. Members can plan their afternoons. The Leader of the House was responsible for the difficulties which were created for hon. Members this afternoon by the incompetence which he undoubtedly displayed. I hope that that is not a precedent and that you would deprecate any future occurrences.

Madam Speaker : As a matter of fact, the matter has nothing to do with the Leader of the House. [ Hon. Members :-- "Hear, hear."] Order. The matter is the responsibility of the authorities of the House. I have to tell the hon. Gentleman and the House that I did not notice that the information was not on the annunciator. The hon. Gentleman is quite right that it should be on the annunciator by 1 o'clock to allow hon. Members to make preparations. I assure the hon. Gentleman that I will take the matter up as soon as I have left the Chair.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 21 JANUARY Members successful in the ballot were :

Mr. James Couchman

Mrs. Ann Winterton

Mr. John Hutton


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Orders of the Day

Statutory Sick Pay Bill

Order for Second Reading read.

5.53 pm

The Secretary of State for Social Security (Mr. Peter Lilley) : I beg to move, That the Bill be now read a second time.

I will endeavour to be brief, both because this is a short and simple Bill and because I want to leave the Opposition a full opportunity to spell out their alternative proposals--if they have any. If not, the House can have the pleasure of hearing the Opposition defend the current arrangements for statutory sick pay, even though they have consistently opposed them since they were introduced in 1983.

The Bill will give employers a greater incentive to improve the health, motivation and attendance of their employees. It will reduce and simplify the administrative burden of statutory sick pay. At the same time, we will ensure that employers in general have lower costs. Small employers will be fully reimbursed for the cost of illness after four weeks. The Bill will ensure, from April 1995, that lower-paid employees get the higher rate of sick pay.

Britain has the highest rate of sick leave of any country in the EC except Holland. The total cost to British industry of sickness is enormous. Recent surveys put the total direct costs at somewhere between £9 billion and £13 billion a year.

The extent of sickness and sick leave in a firm is not primarily the result of external factors outside an employer's control. The rate of sick leave varies greatly between firms, even within the same industry. High rates of sick leave often reflect poor motivation, stressful relationships, inadequate working environment, lack of interest in staff well-being and poor monitoring of absence.

Mr. Bob Cryer (Bradford, South) : Does that apply to Members of Parliament?

Mr. Lilley : The hon. Gentleman makes a point about the attendance records of hon. Members. I will tell him that, of the 200 best-attending hon. Members, 191 were Tories and only six were members of the Labour party.

The variations are within the control of management. When managers take an interest in the health, attendance and well-being of staff, they can substantially reduce levels of absence.

For example, an Audit Commission study three years ago criticised London boroughs for their deplorably high level of sick leave. On average, local government workers took 17 days off sick a year--twice the national average. The Audit Commission advised them how this could be improved and they have taken note of that advice. The latest figures show that the average is now reduced to 11 days. That is still high by comparison with private industry, but it shows what can be achieved by better management.

There are considerable variations within the private sector. Japanese companies have put great emphasis on the motivation and the well-being of their employees. As a result, according to the Industrial Society, Japanese -owned companies in Britain lose little more than half as many days through sickness as the British average.


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Mr. Alfred Morris (Manchester, Wythenshawe) : Leaving aside small employers, is the Secretary of State aware that many employers do not pay statutory sick pay and that others sack people if they are sick? I ask the right hon. Gentleman to consider two brief cases before he concludes his speech.

First, an employee in the west midlands, who has been employed by a firm for three years, was off work due to an accident at work. The employer made it clear that he never pays statutory sick pay. Secondly, the citizens advice bureau in Greater Manchester reports an increasing number of dismissals from work in connection with illness. Is that not a serious problem and will the Secretary of State comment on those cases before he concludes?

Mr. Lilley : The hon. Gentleman must be mistaken. It is a statutory scheme which employers have a statutory obligation to pay. Some employers do pay occupational sick pay, which is higher and more generous than statutory sick pay. Some do not claim statutory sick pay back from the state, although they pay the amount or more than the amount and are continuing to pay it to their employees. I will get on to the question of the response of companies in recruiting and maintaining in employment people with poor health records later.

Mr. John Carlisle (Luton, North) : My right hon. Friend may have heard of Beijing flu, which is apparently raging in the country at the moment. He may like to know that a constituent company of mine which I visited the other day reported that of the 40 sub-contractors which they use, not one suffered from Beijing flu last month. Of the 10 people whom they employ directly, some seven have, on the basis that the state will pay for their statutory sick pay. Does not that emphasise that people will swing the lead if they think that the taxpayer will pay for it?

Mr. Lilley : My hon. Friend makes a telling point. It is certainly true that there are variations in employment which cannot be explained by medical factors. The prevalence of what the Foreign Office would prefer us to call Peking flu is one of those factors. Today, a company has welcomed the Government's action in putting responsibility for sick pay back with companies. That company is Unipart, one of our leading manufacturers. It has taken the lead, particularly in improving employee conditions. Absenteeism at one of its factories used to be about 8 per cent. a year. Two years ago, Unipart introduced new working practices. People now work in teams in an improved working environment, with more challenging work and much more control over their own process. As a result, absenteeism has dropped to less than 2 per cent. and it has remained below that level. That is despite improvements in the generosity of the company's own sick pay scheme.

Yesterday, the hon. Member for Southampton, Itchen (Mr. Denham) mocked the idea of employers

"deciding to expand their occupational health service--perhaps installing a gym."--[ Official Report, 14 December 1993 ; Vol. 234, c. 876.]

Unipart's management did just that, because they see employees as stakeholders. They believe that the benefits in employee fitness are self- evidently of value to the firm. Unipart has publicly welcomed the Government's decision to put the responsibility for sick pay back with companies. It sees that as challenging management to search for the


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root causes of absenteeism and it believes that the net result will improve the performance of the United Kingdom economy.

However, the reimbursement of the cost of statutory sick pay reduces employers' incentive to take positive action to improve the health and attendance of their staff. At the same time, it sends a message that that is not their responsibility, nor within their control. It means that good employers who minimise sick leave are effectively subsidising poor employers who do nothing to tackle the problem.

Moreover, smaller employers in general have a much lower level of absence through sickness than do large employers. The CBI/Percom study, for example, showed that large companies with over 5,000 employees have twice the level of absence through sickness as do companies with fewer than 100 employees. Of the smallest employers with 10 or fewer staff, 37 per cent. had no staff absences through sickness long enough to qualify for statutory sick pay in 1991-92. By abolishing reimbursement, I believe that we will give employers greater incentive to motivate employees, to care for their health and to monitor their absence.

At the same time, I intend to reduce employers' national insurance contributions by more than enough to offset the impact on employers as a whole of ending reimbursement of statutory sick pay. The ending of the 80 per cent. reimbursement of statutory sick pay means that employers would forgo about £695 million in 1994-95, but there will be £25 million of special help for small employers.

The reduction in employers' national insurance rates will cut their national insurance contributions by some £830 million next year. That saving will reach nearly £1 billion by 1996-97. Therefore, employers in aggregate will be some £160 million pounds better off next year as a result of the combined impact of the changes and, as employers respond to the incentive to improve attendance, they will be substantially better off still.

Dr. Keith Hampson (Leeds, North-West) : Let me draw my right hon. Friend's attention to the problem that most people are not sick for four weeks or more, so that the bulk of costs on all sizes of companies will fall on the employer. Could not Peking flu create acute cash flow problems to a small company with a sudden abnormal rate of sickness? Will he consider whether there should be full reinbursement to small companies if a certain percentage of the national insurance contribution is crossed?

Mr. Lilley : Particular harm is caused by the prolonged absence of key employees in small firms. However, small employers usually have lower rates of sickness and absenteeism than larger companies, so they will be net beneficiaries from the change. There may be odd weeks when they suffer because a large number of staff are off sick, but they will be gaining throughout the rest of the year. Overall, they will benefit financially from the change, particularly if they have lower-paid employees. They should also welcome the change because it gives them greater control over their own bills.

Sir Michael Grylls (Surrey, North-West) : It would be extremely helpful if, in the spirit of deregulation, my right hon. Friend would consider whether some of the paperwork and administrative burdens of smaller firms


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could be simplified. Will he examine the role of the DSS or the social security inspectors who might take a more lenient view if a smaller firm genuinely finds it difficult to understand the complex regulations, and perhaps be slightly more tolerant than in the past? Perhaps the DTI one-stop shops could advise smaller employers on those aspects of book keeping, record keeping and understanding regulations?

Madam Deputy Speaker : Order. An intervention is not a speech, and that was rapidly becoming one.

Mr. Lilley : My hon. Friend has raised some important points about the burden on employers and the opportunities for deregulation. The changes will reduce the burden on employers and open up scope for further reductions in due course. As for the enforcement of existing rules by inspectors, I shall take account of my hon. Friend's point, but I believe that the actual number of legal cases ever brought under the rules is extremely limited. I recall only one and the fine was £30. Nonetheless, we do not want onerous enforcement measures and I shall take on board my hon. Friend's point. I propose to reduce the highest rate of employers' national insurance by 0.2 per cent. from 10.4 per cent. to 10.2 per cent. and the three lower rates by a whole percentage point. That will particularly benefit employers of less highly paid staff and make it more attractive for them to take on extra employees.

A firm whose employees all earn £170 a week will save £88 over the year on national insurance for each employee. If the firm has average sickness, it will forgo reimbursement of SSP over the year worth £43 per employee, so on average it will gain £45 per employee per year. A company with the same pay level but twice the national sick leave will still break even on the two changes.

Mr. Donald Dewar (Glasgow, Garscadden) : May I make a brief point requesting information. When statutory sick pay becomes one level of return for the person who is ill, how will the uprating work? I understand that the upper level, which will now be combined with the others, has been frozen since 1990. It does not fall under the obvious Rossi or RPI machinery. How will it be uprated in future?

Mr. Lilley : I shall make a wise judgment each year on the amount by which it will be uprated.

Small organisations usually have below average sickness levels, but their operations may be harder hit by the prolonged absence of even a single member of staff. I therefore intend to increase the special help that we give small employers and extend it to more of them. At present, smaller employers receive 100 per cent. reimbursement of statutory sick pay on absences in excess of six weeks. In future, they will receive 100 per cent. reimbursement after only four weeks. At present, firms with total national insurance contribution bills of £16,000 qualify for such help. In future, I shall extend it to firms with bills of up to £20,000.

Yesterday, the right hon. Member for Derby, South (Mrs. Beckett) said that we had attempted to conceal the fact that the abolition of 80 per cent. reimbursement would apply to small employers as well as to large ones. That is absolute nonsense.


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Let me read the letter that we sent to all the small business organisations on the day of the Budget. On statutory sick pay it said :

"80 per cent. reimbursement will cease from 6 April 1994 i.e. there will be no reimbursement of statutory sick pay payable for sickness on or after that date."

That could not be clearer. It continues :

"special help for small employers will be retained and enhanced. Employers remitting national insurance contributions totalling £20, 000 or less in 1993-94 will be eligible for 100 per cent. reimbursement of statutory sick pay for illness lasting longer than four weeks.".

There was no attempt to conceal that. We have an interest in employers understanding the changes and implementing them rapidly in time for next April.

Our proposals will help 50,000 extra employers, some 750,000 in total--that is two thirds of all employers--at a total cost of £25 million.

Small employers will also benefit more from the reduction in national insurance rates. The reduction is greater for employees on low earnings who tend to form a high proportion of the work force in small companies.

The Budget also included a number of other measures to help small employers and those proposals have been welcomed by industry. Abolition of reimbursement will also reduce the administrative burden on employers. They will no longer have to work out their total statutory sick pay bill for the year in order to calculate how much national insurance they are due to pay.

The abolition of the lower rate of statutory sick pay will be introduced in the Bill to reform invalidity benefit, with effect from April 1995. It will further reduce the burden on employers. Previously, they had to calculate each employee's average earnings to determine which rate of statutory sick pay applied and how much they could claim. That will no longer be necessary when there is only one rate.

Earlier this year, we set up a working party with employers to examine the scope for cutting red tape in the statutory sick pay scheme. We shall be discussing with that group whether ending reimbursement of statutory sick pay further opens up scope for reducing the burden on employers without affecting employees' rights.

As a result of the changes, British employers will retain their relative advantage over their continental competitors. European Community employers face much greater burdens than we do. For example, German employers must pay full wages for the first six weeks of illness, yet they receive no reimbursement and pay higher social security charges. Dutch employers have to pay sick employees 70 per cent. of their earnings up to £282 per week for up to a year and they bear five sixths of the cost.

The Opposition have claimed that ending reimbursement of statutory sick pay will lead to employers sacking sick employees and being more reluctant to take on disabled staff. They made the same claim when the rate of reimbursement was reduced from 100 per cent. to 80 per cent. in 1991.

There has been no evidence of sick employees being sacked or companies being more reluctant to employ people who have been sick. I will receive soon the Centre for Social Policy Research report examining the effects of the 1991 changes and I will publish it as soon as I do. I understand that it will not help the Opposition's case and that there is no evidence that disabled staff have been affected. In fact, it would be perverse as well as inhumane


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for employers to reduce job opportunities for the disabled. The evidence is that they have a better than average attendance record. The more that that is widely known, the more we shall be pleased. We shall continue to promote employment opportunities for disabled people. I was pleased to announce in the social security statement that the disability working allowance will be made more attractive. From April 1995, beneficiaries will be entitled to free prescriptions, free dental treatment and other NHS benefits.

Dr. Robert Spink (Castle Point) : Is my right hon. Friend aware that I am a registered disabled person, yet I returned the joint third best participation rate in the House in the last Session?

Mr. Lilley : My hon. Friend is proof of many great truths and I congratulate him on his record. As I said earlier, he is not joined in the top 200 by many Opposition Members. Last night, we had sad evidence of an outbreak of sickness on the Labour Benches, when the Opposition were unable to muster a quorum to continue their own Consolidated Fund debates. It is a difficult area for the Labour party in respect of attendance records and of previous Labour Governments.

The last Labour Government imposed a surcharge on employers' national insurance that brought the total amount paid by employers to 13.5 per cent. of their pay bill. If that rate applied today, industry would bear an additional burden of £8 billion a year. The final consequence of our changes is that once employers meet the full cost of SSP, it will become a form of pay and thus be subject to the EC equal treatment directive. Women and men will be entitled to statutory sick pay on the same basis. As a result, women will be entitled to receive it until the age of 65, rather than age 60 at present. That is catered for in the Bill.

Statutory sick pay has been successful in meeting its aim of delivering sick pay through the wage packet rather than requiring employees to collect it at benefit offices. It cuts out wasteful duplication of work by employers and the state and the opportunities for a further reduction of duplication are enhanced by the Bill. The introduction of SSP cut civil service numbers by 3,700 and ended the anomaly whereby employees received more money when off sick than at work. I shall shortly introduce a new Bill to reform the whole structure of incapacity benefits. It will create a single SSP rate from April 1995, which will help those in lower-paid jobs. The overall structural reform will provide a more integrated set of sickness benefits than ever before and it reflects the first fruits of our sector-by-sector reform of social security. We have now tackled sickness benefits and we are in the process of improving them and providing an up-to -date and well-focused set of sickness benefits.

The Bill will improve incentives to employers for increasing the well- being, attendance and health of their staff ; lead to reduced costs for industry ; and provide a more rational benefits structure for the future. I commend the Bill to the House.

6.13 pm

Mr. Donald Dewar (Glasgow, Garscadden) : I appreciate the succinct way in which the Secretary of State put his case. His short speech set out the bare essentials of the


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proposals encapsulated in the Bill. It is part of a package deal offered by the Government and interconnects with a number of interesting arguments.

There is no doubt that this important legislation deserves the proper attention that the House will want to give over the next few hours. I have no intention of re-opening the argument about the timetable motion, but it is important that the House examines what is being offered and its consequences and significance.

One problem is that the unified Budget took some of us by surprise. The new procedures are difficult, for a unified Budget presents a mound of issues. Everything but the kitchen sink was thrown in, in terms of fiscal revenue raising and public expenditure. There is a danger that we shall lose definition and not focus as we should on all the Budget's component parts with the clarity that they deserve. I am glad of this opportunity to put that right.

In yesterday's allocation of time debate, we heard that the Bill has only one effective clause. Clause 1 abolishes for large employers--those that account for 85 per cent. of the work force--the 80 per cent. rebate on statutory sick pay. Clearly, that is of interest to them and to those of us concerned about the way that the system works.

I do not suggest that that comes entirely as a surprise. The Secretary of State reminded the House that the rebate system was introduced just over 10 years ago. Early in its career, it became clear that the Government had reservations about the way that it operated or at least about its part in the social security system. In 1990, a significant change occurred, when the 100 per cent. rebate plus the 7 per cent. to reimburse companies for the administrative charges that they incurred was reduced to 80 per cent.-- and now that is being obliterated. It has been suspected for some time that that was the start of a slide into oblivion in terms of both the rebate and Government involvement.

In connection with yesterday's debate on the guillotine motion, to which my right hon. Friend the shadow Leader of the House contributed, there were exchanges between members of the Public Accounts Committee and the Permanent Secretary at the Department of Social Security. I make no complaint that they were slightly "Yes, Minister" in their tone. We were presented with the Government's usual "We have no plans" formula. That kind of response gives plausibility to the theory that in this country, one should believe nothing until it has been officially denied. That was a further warning shot about the likely course of events. Expectations or fears, depending on one's point of view, are amply borne out by the Bill now before the House. The majority of employees will depend no longer on the subsidy provided by the rebate but on their employers' resources--the scheme will be funded by industry. I hope that the Secretary of State will not think me over-partisan when I say that that is strike one for the Chief Secretary to the Treasury and for his loyal lieutenant at the Department of Social Security. It is at least one area where it has been discovered that it will be possible for the Government to withdraw altogether, which is the proposition we are asked to consider.

I accept that many companies have occupational schemes that incorporate sickness cover. However, a much-quoted 1989 survey suggested that 91 per cent. of employees were covered by such an arrangement. I do not


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