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Sick Pay

Volume 982: debated on Wednesday 2 April 1980

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asked the Secretary of State for Social Services when he will announce his proposals to make employers statutorily responsible for sick pay.

The Government have today published a Green Paper "Income During Initial Sickness: A New Strategy" (Cmnd. 7864). The paper sets out for discussion our proposal that in the early weeks of sickness employers should provide sick pay for their employees in place of national insurance sickness benefit.We have thought it right to review the role of the State in providing sickness benefit against the background of the increasing number of employees who are covered by occupational sick pay arrangements and in the belief that the State should, wherever possible, withdraw from activities which firms and individuals can perform perfectly well for themselves.Furthermore, there are two unsatisfactory features of the present system. First, a large number of employees are at present financially better off when sick than when at work because they receive the equivalent of full pay but do not pay tax on that part of it represented by national insurance benefit. This unsatisfactory situation will continue until we are able to bring benefits within tax. Secondly, many thousand civil servants are engaged in the administration of sickness benefit which is often payable for short periods to people who are already receiving sick pay from an employer who has to provide for the administration of his scheme. This duplication of effort can only be regarded as wasteful.The proposals in the Green Paper would help to remedy both these drawbacks to the present arrangements. Tax would be levied on a much greater proportion of payments made during sickness and there would be large savings in Civil Service numbers.The proposals are neither firm nor final. They are set out as the basis for genuine discussion with all interested parties, and the Government will not take final decisions on the scheme until we have carefuly considered all representations received. I appreciate that what is suggested will require close study and

Region£ millionpercentage of hospital and community health revenue expenditure
East Anglian0·3770·2
North West Thames2·6660·7
North East Thames2·9230·7
South East Thames2·6030·7
South West Thames2·2550·7
South Western0·9330·3
West Midlands1·7380·4
North Western1·3060·3
All RHAs20·2000·5
Boards of Governors0·5130·6
*Includes employer's contributions to National insurance and superannuation.