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The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague) : This has been an interesting and varied debate, in which a large number of points were raised. We heard the first speech from the hon. Member for East Kilbride (Mr. Ingram) as a member of the Opposition Front Bench, to which I welcome him. I look forward to many more exchanges with the hon. Gentleman across the Dispatch Box. I have never heard a debate in which so many Opposition Members quoted business organisations, prayed them in aid, and recited Confederation of British Industry briefs and other documents. That is a hazardous tactic when the CBI concluded that

"the CBI does not wish to oppose the SSP Bill."

It is equally hazardous to pray in aid the Institute of Directors, because we are informed that it would welcome the SSP and national insurance changes overall, provided that the Government are prepared to mount a fundamental review of the SSP scheme's compliance burden on business. I am happy to confirm that we will look at that scheme in conjunction with employers, to determine the scope for cutting red tape without affecting employees' rights. We will consider also whether firms offering generous occupational sick pay could opt out of the SSP sick scheme. Quoting employers is a dangerous tactic for Opposition Members.

Mr. Mandelson : Will the Minister give way ?

Mr. Hague : I want to develop these points, because I was asked a number of questions. I will give way in a moment.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked about the European equal treatment directive. The reason why women must be entitled to SSP until they are 65 is that, once reimbursement is abolished, SSP will become a form of pay and, therefore, outside the scope of the pension age derogation from the EC equal treatment directive. Retirement pension, however, will still be a benefit and thus still subject to the derogation. It will still be possible to pay retirement pension on a different age basis to women and men and there should be no scope for legal doubt about that. We do not expect any of the difficulties that the hon. Gentleman described. The hon. Member for Rochdale (Ms Lynne) appeared to be under a number of misapprehensions. She spoke of the payments that people have made over many years to the national insurance fund, but statutory sick pay is not a national insurance benefit and so is not met by that fund. I wonder whether the calculation she cited, provided by a small business in her constituency, took account of reductions in national insurance contributions that are part and parcel of the policy and of considerable benefit to

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businesses of all sizes. The most damning quotation that the hon. Lady could give in respect of large businesses was that IBM is "looking into the measures". She says that the policy is to get the Government out of a public sector borrowing requirement hole, but the policy does not reduce the PSBR, because the reduction in national insurance contributions more than offsets the reduction in statutory sick pay.

Mr. Mandelson : The hon. Gentleman's argument relies on the assumption that the compensating decrease in national insurance contributions will remain just that--decreased. Will he take this opportunity to give a firm and unequivocal undertaking to the House that that compensating decrease will not under any circumstances be reversed in future years? If he were not to do so, his remarks would appear extremely hollow.

Mr. Hague : The hon. Member knows that neither the Government nor the Opposition are likely to give commitments about the future level of national insurance contributions. We can, however, point very clearly to our record on employers' national insurance contributions, which for lower- paid employees will be 3.6 per cent. after the change, compared with 13.5 per cent. in 1979. Any employer who is concerned about that has to do no more than consider the record of each party in office to see what is most likely to happen.

Mr. Dewar : Employers may well be unnecessarily suspicious, but the Minister must accept that the prospect causes them to look forward with fear. The other aspect is the argument made by the Confederation of British Industry and various other organisations about the likely shift of other benefits on to the employer. Industrial injury benefit has been especially canvassed, as has maternity benefit. Can he perhaps help us on that subject, by telling us that there are no plans, and no intention, to move further down that road?

Mr. Hague : I recognise that the hon. Member, in his speech as well as his intervention, would prefer to argue against changes that he imagines and foresees rather than against the Bill. This is the Second Reading of the Statutory Sick Pay Bill. That is the subject of our debate. It may help the Opposition to tilt at all types of targets that have not been presented to them, but those targets are not on offer this evening ; I can assure the hon. Gentleman of that. My hon. Friend the Member for Castle Point (Dr. Spink) asked for an assurance about complexity and I can give him the same assurance that I gave a few moments ago ; we will discuss with employers the further scope for cutting red tape.

The hon. Member for Burnley (Mr. Pike) mentioned a number of issues. He especially mentioned the construction industry and asked whether such an industry would be placed at a particular disadvantage. The construction industry has an average of about 3 per cent. of employees claiming statutory sick pay, so it is most unlikely to be disadvantaged in any way. In fact, it should be a net beneficiary of the change in statutory sick pay and national insurance contributions if one takes them together.

The hon. Member for Burnley also asked how the Government will ensure that employees are getting their proper entitlement, and whether there are a large number of cases in which they are not. The abolition of SSP

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reimbursement will have no effect on an employees' entitlement to SSP, but, should a dispute arise between an employee and his or her employer about entitlement, it can be resolved by adjudication procedures.

Where an employer fails to comply with a decision of the adjudicating authorities within the prescribed time and does not appeal, the Secretary of State will assume responsibility for payment, and legal proceedings against the employer will be considered for his non-payment. Inspectors of the Contributions Agency already operate a system of spot-checking of employers' pay records and that will continue. Officials have discussed with the Trades Union Congress the possibility of displaying a new poster in workplaces, reminding employees of their rights. The design and wording of a poster, together with a leaflet, are being evaluated.

A great deal is being done, therefore, and a great deal of redress is available to employees who think that they may be entitled to statutory sick pay, but are not receiving it.

My hon. Friend the Member for Bury St. Edmunds (Mr. Spring) rightly pointed to the experience of London boroughs in reducing, when they made an effort to do so, the average number of days of absence through sickness in three years from 17 days on average to 11.5. He drew attention--also quite rightly--to the Financial Times article of 8 December, only a week ago, which listed a large number of companies that have taken the initiative, have tried to reduce sickness levels in their companies and have had tremendous success in doing so. To quote one example from the article,

"Vauxhall, the UK car maker, has reduced its sickness absenteeism from 8.8 per cent. in 1986 to 4.5 per cent. today. This was after the company introduced a negotiated incentive scheme which saved employees about £4 a week in contributions to the company sick pay scheme if average levels of sick leave could be kept at or below 5 per cent."

The article points out :

"Many factors underlie improved absence records, but whether it is knowing that someone in management cares or fearing that they are watching, both approaches seem more effective than the alternative of managerial neglect."

It is managerial neglect of the issue which we are tackling with the Bill. Opposition Members have underestimated the difference that can be made by giving employers an incentive to tackle the problem. It may seem a trivial example, but what happened in Sweden, that paradise of social provision, when they abolished state sick pay for the first two weeks of sickness? Did employers then say, "We are going to sack people who are ill for a short time"? They actually ran out of influenza vaccine in Sweden because employers went on such a campaign of immunising their employees against sickness.

A great deal can be done by employers to help with the health of their employees and a great deal more is being done by some employers. That should be recognised by Opposition Members. I have already referred to the fact that the CBI says in its much-quoted brief that it does not wish to oppose the Bill. The problem for the hon. Member for Garscadden and his colleagues tonight was that they did not wish to oppose the Bill, but felt that they ought to do so. He said at one point in his speech, when my hon. Friend the Member for Havant (Mr. Willets) had intervened, that he feared that he would go off the road and into a field. When one listened to the hon. Gentleman's speech, one found that, first, he had a principal fear that people might be squeezed from their benefits, but he also feared that we might make the

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scheme more generous for employees and that employers would have to pay more. He said that at first he was afraid that there was a major transfer of costs to employers, but then realised that there was not. He said that he accepted that sickness absence figures were not good and ought to be improved, but he failed to offer any alternative. It was rather less like going off a road and into a field than going round an endlessly confusing roundabout, with many signals pointing in different directions and with the hon. Gentleman at the wheel of the car, careering around the roundabout, peering into the distance, looking for something that would come over the horizon which would present a more attractive target than the Bill before the House at the time. He ought to reflect on some of his comments in that speech.

Mr. Dewar rose --

Mr. Hague : I have only three minutes left, so I think that I should tell the hon. Gentleman that the Bill is an opportunity to improve the sickness record of industry ; it is an opportunity to clarify responsibility for sickness rates ; it is an opportunity to reduce unnecessary bureaucracy in the future ; it is an opportunity to reduce the overall total and burden of public expenditure ; it is an opportunity to reduce industry's costs through a major offsetting reduction in national insurance contributions, a reduction to a level which a Labour Government could never have contemplated and which, for low-paid employees, is a fraction of the levels under a Labour Government.

After this change, when the employee's and employer's contributions are added together, the national insurance contribution payable for an employee on a weekly wage of £130 will be £15.72. It would have amounted to £26 a week in 1979. That is a dramatic reduction. What is the attitude of the Opposition to this proposal? Blindly to oppose, without having a better proposal--without any proposal--to put before the House. They are not doing so in the interests of employees, because their sickness payments will be maintained, or in the interests of the disabled, because they have a better than average sickness record, or in the interests of small businesses, because they will be better off, and they are not doing it in the interests of well-managed, large businesses because they have a great opportunity to reduce their sickness rates.

In this debate, the Opposition have been reduced to being the defenders of weak, complacent and inefficient management--the only people who stand to gain from their attitude. Perhaps, after their performance with parliamentary procedures during the past two weeks, they identify to a certain extent with weak and inefficient management and that is why they have taken that stance tonight. I urge all my hon. Friends to support the Second Reading.

It being three hours after the commencement of proceedings on the motion, Mr. Deputy Speaker-- put the Question already proposed from the Chair, pursuant tf

Division No. 43] [8.50 pm

AYES

Ainsworth, Peter (East Surrey)

Alexander, Richard

Alison, Rt Hon Michael (Selby)

Allason, Rupert (Torbay)

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Amess, David

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas (Hazel Grv)

Ashby, David

Aspinwall, Jack

Atkinson, David (Bour'mouth E)

Atkinson, Peter (Hexham)

Baker, Nicholas (Dorset North)

Baldry, Tony

Banks, Matthew (Southport)

Banks, Robert (Harrogate)

Batiste, Spencer

Bellingham, Henry

Bendall, Vivian

Beresford, Sir Paul

Biffen, Rt Hon John

Blackburn, Dr John G.

Bonsor, Sir Nicholas

Booth, Hartley

Boswell, Tim

Bottomley, Peter (Eltham)

Bottomley, Rt Hon Virginia

Bowden, Andrew

Bowis, John

Boyson, Rt Hon Sir Rhodes

Brandreth, Gyles

Brazier, Julian

Bright, Graham

Brooke, Rt Hon Peter

Brown, M. (Brigg & Cl'thorpes)

Browning, Mrs. Angela

Bruce, Ian (S Dorset)

Budgen, Nicholas

Burns, Simon

Burt, Alistair

Butcher, John

Butler, Peter

Butterfill, John

Carlisle, John (Luton North)

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Carttiss, Michael

Cash, William

Channon, Rt Hon Paul

Churchill, Mr

Clappison, James

Clark, Dr Michael (Rochford)

Clarke, Rt Hon Kenneth (Ruclif)

Clifton-Brown, Geoffrey

Coe, Sebastian

Colvin, Michael

Congdon, David

Conway, Derek

Coombs, Anthony (Wyre For'st)

Coombs, Simon (Swindon)

Cope, Rt Hon Sir John

Cormack, Patrick

Couchman, James

Cran, James

Currie, Mrs Edwina (S D'by'ire)

Curry, David (Skipton & Ripon)

Davis, David (Boothferry)

Day, Stephen

Deva, Nirj Joseph

Devlin, Tim

Dickens, Geoffrey

Dicks, Terry

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

Duncan, Alan

Duncan-Smith, Iain

Dunn, Bob

Durant, Sir Anthony

Dykes, Hugh

Eggar, Tim

Emery, Rt Hon Sir Peter

Evans, David (Welwyn Hatfield)

Evans, Jonathan (Brecon)

Evans, Nigel (Ribble Valley)

Evans, Roger (Monmouth)

Evennett, David

Faber, David

Fabricant, Michael

Fairbairn, Sir Nicholas

Fenner, Dame Peggy

Field, Barry (Isle of Wight)

Fishburn, Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Fowler, Rt Hon Sir Norman

Fox, Dr Liam (Woodspring)

Fox, Sir Marcus (Shipley)

Freeman, Rt Hon Roger

French, Douglas

Fry, Peter

Gale, Roger

Gallie, Phil

Gardiner, Sir George

Garel-Jones, Rt Hon Tristan

Garnier, Edward

Gill, Christopher

Gillan, Cheryl

Goodlad, Rt Hon Alastair

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Gorst, John

Grant, Sir A. (Cambs SW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Griffiths, Peter (Portsmouth, N)

Grylls, Sir Michael

Gummer, Rt Hon John Selwyn

Hague, William

Hamilton, Rt Hon Archie (Epsom)

Hampson, Dr Keith

Hannam, Sir John

Hargreaves, Andrew

Harris, David

Haselhurst, Alan

Hawkins, Nick

Hawksley, Warren

Hayes, Jerry

Heald, Oliver

Heathcoat-Amory, David

Hendry, Charles

Heseltine, Rt Hon Michael

Hicks, Robert

Higgins, Rt Hon Sir Terence L.

Hill, James (Southampton Test)

Hogg, Rt Hon Douglas (G'tham)

Horam, John

Hordern, Rt Hon Sir Peter

Howarth, Alan (Strat'rd-on-A)

Howell, Rt Hon David (G'dford)

Howell, Sir Ralph (N Norfolk)

Hughes Robert G. (Harrow W)

Hunt, Rt Hon David (Wirral W)

Hunt, Sir John (Ravensbourne)

Hunter, Andrew

Hurd, Rt Hon Douglas

Jack, Michael

Jenkin, Bernard

Jessel, Toby

Johnson Smith, Sir Geoffrey

Jones, Gwilym (Cardiff N)

Jones, Robert B. (W Hertfdshr)

Jopling, Rt Hon Michael

Kellett-Bowman, Dame Elaine

Key, Robert

Kilfedder, Sir James

King, Rt Hon Tom

Kirkhope, Timothy

Knapman, Roger

Knight, Mrs Angela (Erewash)

Knight, Greg (Derby N)

Knight, Dame Jill (Bir'm E'st'n)

Knox, Sir David

Kynoch, George (Kincardine)

Lait, Mrs Jacqui

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