Lords Chamber

Tuesday 13th May 2025

(began 4 hours, 7 minutes ago)

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14:40
None Portrait Introduction(s): Lord Harper and Lord Massey of Hampstead
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Charles Charles III, Charles III, by Charles III, by the Charles III, by the grace Charles III, by the grace of Charles III, by the grace of God of the United Kingdom of Great Britain and Northern Ireland and of our other realms and territories King, Head of the Commonwealth, Defender of the Faith, to all Lords Spiritual and Temporal and all other our subjects whatsoever to whom these present shall come, greeting. Know ye that we of our especial grace, certain knowledge and mere motion, in pursuance of the Life Peerages Act 1958 and of all other powers in that behalf us enabling do, by these presence advance, create and prefer our trusty and well beloved, Mark James Harper to the state, degree, style, dignity, title and honour of Baron Harper of the Forest of Dean in our county of Worcestershire.

And for us, our heirs and successors, do appoint, give and grant unto him the said name, state, degree, style, dignity, name, state, degree, style, dignity, title and honour of Baron Harper to have and to hold unto him for his life. Willing and by these presence granting, for us, our heirs and successors that he may have, hold and possess a seat, place and voice in the Parliaments and Public Assemblies and Councils of us, our heirs and successors, within our United Kingdom, amongst the Barons.

And also that he may enjoy and use all the rights, privileges, preeminences, immunities and advantages to the degree of a Baron, duly and of right belonging, which Barons of our United Kingdom have heretofore used and enjoyed or as they do at present use and enjoy. In witness whereof we have caused these our letters to be made patent, witness ourself at Westminster in the full moon of the 12th day of May in the third year of our reign. By warrant under the Kings sign manual.



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I, Mark Lord Harper, do swear by Almighty God that I will be faithful Almighty God that I will be faithful and bear true allegiance to His Majesty King Charles, his heirs and Majesty King Charles, his heirs and successors, according to law. So

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Charles

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Charles III, Charles III, by Charles III, by the Charles III, by the grace Charles III, by the grace of Charles III, by the grace of God of the United Kingdom of Great Britain and Northern Ireland and of our other realms and territories our other realms and territories King, Head of the Commonwealth, Defender of the Faith, to all Lords Defender of the Faith, to all Lords Spiritual and Temporal and all other our subjects whatsoever to whom these present shall come, greeting.

these present shall come, greeting. Know ye that we of our especial grace, certain knowledge and mere motion, in pursuance of the Life Peerages Act 1958 and of all other Peerages Act 1958 and of all other powers in that behalf us enabling do, by these presence advance, create and prefer our trusty and create and prefer our trusty and create and prefer our trusty and well beloved, Stephen Leigh Massey To the state, degree, style, To the state, degree, style, dignity, title and honour of Baron Massey And for us, our heirs and successors, do appoint, give and grant unto him the said name, state, degree, style, dignity, title and honour of Baron Massey to have and to hold unto him for his life.

Willing and by these presence granting, for us, our heirs and successors that he may have, hold and possess a seat, place and voice in the Parliaments and Public Assemblies and Councils of us, our heirs and successors, within our United Kingdom, amongst the Barons. And also that he may enjoy and use all the rights, privileges, preeminences, immunities and advantages to the degree of a Baron, duly and of right belonging, which Barons of our United Kingdom have heretofore used and enjoyed or as In witness whereof we have caused these our letters to be made patent, witness ourself at Westminster in the afternoon of the 12th day of May.

In the third year of our reign. By warrant under the King's sign- By warrant under the King's sign- !, Stephen Leigh Massey, do swear by Almighty God that I will be faithful and bear true allegiance to His Majesty King Charles, his heirs and successors, according to law. So First First Oral First Oral Question. First Oral Question. First Oral Question.
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Lord Ponsonby of Shulbrede Portrait Lord Ponsonby of Shulbrede, The Parliamentary Under-Secretary of State for Justice (Labour)
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I thank the Minister for the answer. In March 2024, there were £4.4 billion of unpaid criminal court fines, compensation orders and surcharges. Does the Minister agree that steps should be taken urgently to deal with this unacceptable situation, which is grossly unfair on those who do actually pay up and leads to scepticism in the judiciary and society at large the effectiveness of non-custodial

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sentences? I thank my noble friend for the supplementary question. Of the £4.4 billion which she referred to, £2.7 billion which she referred to, £2.7 billion is confiscation orders. And billion is confiscation orders. And of that figure, £1.2 billion is purely interest full stop interest purely interest full stop interest is paid at 8% on the confiscation order amount. There are legislative order amount. There are legislative changes which are in the Crime and changes which are in the Crime and Policing Bill which is currently in the other place.

I think it is worth the other place. I think it is worth pointing out to my noble friend that in existing legislation there are in existing legislation there are only very limited circumstances where a Crown Court can judicially where a Crown Court can judicially cancel and and order and it contains cancel and and order and it contains no powers to enter confiscation order which means it accrues over the years including the interest. With respect to financial penalties, the picture is very different.

Over a five year period, 80% of all a five year period, 80% of all financial penalties, of orb finds a financial penalties, of orb finds a means, are collected. And that figure of 80% has remained flat over figure of 80% has remained flat over the last few years. So while I accept that the overall number is increasing, I think that gives an increasing, I think that gives an unfair picture of the current situation, and the government is addressing the reasons why that is an unfair reflection of the position.

position.
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Lord Vallance of Balham Portrait Lord Vallance of Balham, Minister of State (Department for Science, Innovation and Technology) (Labour)
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government planned to launch an initiative in this field. Could we please have a date on which this is going to be published? Could we have clarity on whether it will target American academics have become very unsettled by the assault on academic freedom in the United States? Could he also tell us whether the recent announcements on immigration by the prime minister will have any adverse consequences for what was originally planned? As I said in answer to an earlier question, I'm very keen to make sure I'm keen to make sure we have a robust system to attract the best talent from all over the world.

I will be making announcements about that very shortly. In terms of the that very shortly. In terms of the Integration White Paper, the Global Integration White Paper, the Global Talent visa rules are ones that have been pulled out as ones that will become easier, they will be facilitated to make this happen. And facilitated to make this happen. And another eyeless areas as well. So in terms of the highly skilled individuals we need, both for the individuals we need, both for the service sector and for that tech sector and the companies, I think sector and the companies, I think there are measures in the White Paper that make that easier.

Paper that make that easier. Is my noble friend aware of the large number of charities that support research that bring overseas senior academics to the UK? We mentioned the Royal Society Wilson Fellowships, and scientific group in Israel, and there are a large number of others was to contribute of others was to contribute of others was to contribute

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There are a number of schemes. Over 200 million of funding goes to Over 200 million of funding goes to the National academies to support core activities, the vast majority is spent on research and talent schemes, and 400 million was given schemes, and 400 million was given to the Royal Society and Royal Academy engineering for their specific fellowship schemes in terms of an endowment. The Faraday discovery Fellowship and engineers from the Green Futures Fellowship, from the Green Futures Fellowship, there are many challenges which contribute and we are fortunate to contribute and we are fortunate to have a charities, including bottom trust, which provide substantial

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funding for fellowship schemes. Other countries have been very quick to act decisively in light of the severe by the Trump administration to US science administration to US science budgets. Is it not a real danger of UK falling behind, is it not something that should be addressed urgently.

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I am going to reiterate the point I made, it is important we make schemes available to people from all over the world, it is not about over the world, it is not about targeting a specific country, we will do so, we are working on schemes at the moment to make attractive offers to individuals and attractive offers to individuals and groups. This is an important area,
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Baroness Smith of Basildon Portrait Baroness Smith of Basildon, Leader of the House of Lords and Lord Privy Seal (Labour)
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Last week, the Palestinian authority declared a famine in Gaza. It was not caused by a flood, it was It was not caused by a flood, it was not caused by a drought or any natural causes, it is entirely man- natural causes, it is entirely man- made. I welcome what the noble Baroness said about the conference being held next week, can the UK government ensure that we point out that there are aid workers already on the ground in Gaza who has been working for years, ceaselessly, to help the Palestinians, and they

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should very much be part of the solution. The noble Lady is right, this is

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The noble Lady is right, this is not... Different aid is not something you can do on a whim, these are people who are these are people who are experienced, who have expertise and the -- and note the areas on the ground. When I referred to the ground. When I referred to the conference, the 1 Taking Pl today in New York, but she is right, there is aid at the borders that could be delivered. People, one in five of the population, are facing the population, are facing starvation.

It is critical, the starvation. It is critical, the sooner we can get the aid in the, the quickest way of doing so is to stop blocking the aid select can be stop blocking the aid select can be delivered to those who are in desperate, dire need of it.

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desperate, dire need of it. Will the Leader of the House except that the sidelining of trusted aid agencies and the militarisation of aid under the militarisation of aid under the scheme will lead to large parts of Gaza where the most vulnerable and least mobile people live are without

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supplies. The noble Lady says there is a

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The noble Lady says there is a scheme in place, I'm not sure there is another scheme, there are is another scheme, there are discussions about it but I have not seen any details. But there cannot be any aid mechanism that does not have delivering humanitarian aid as
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None Portrait Business of the House
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quickly as possible save lives. I said in the beginning, the UK funded... All of our funded aid looks at every possible mechanism to ensure the aid gets to where it is needed which is most vulnerable. We will always do that and DfT we can will always do that and DfT we can

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They have passed the Border Security, Asylum and Immigration Bill, to which they desire the

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Bill, to which they desire the agreement of your Lordships. My Lords, the Border Security,

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My Lords, the Border Security, Asylum and Immigration Bill, I beg

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Asylum and Immigration Bill, I beg to move that this bill be read a first time. This will be read a first time. As many are of that opinion say, "Content". Of the contrary, "Not

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content". The contents have it. This may be a convenient moment for the Lordships who wish to leave for the Lordships who wish to leave the chamber to do so, as I said

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Third Third reading Third reading of Third reading of the Third reading of the Norwich Livestock Market Bill.

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Livestock Market Bill. My Lords I beg to move to move that this bill be read 1/3 time.

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that this bill be read 1/3 time. The question is that this will be read 1/3 time. As many are of that opinion say, "Content". Of the

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contrary, "Not content". The contents have it. I beg to move this bill do now
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Lord Sandhurst Portrait Lord Sandhurst (Conservative)
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Infrastructure Planning (Onshore Wind and Solar Generation) Order.

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Lord Hunt of Kings Heath. I beg to move the Motion standing

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in my name on the order paper. The question is that this motion be agreed to. As many are of that be agreed to. As many are of that opinion say, "Content". Of the contrary, "Not content". The contrary, "Not content". The contents have it. Question to answer on an Urgent Question asked in the on an Urgent Question asked in the House of Commons yesterday on the protection of prison staff. protection of prison staff.

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My Lords, on 3 April, 'The Times' reported that Islamist gangs had created Gross dysfunction in HMP Frankland in which large numbers of convicted terrorists are held. Just convicted terrorists are held. Just nine days later, on 12th April, the Manchester bomber, detained in the Manchester bomber, detained in the same prison, through hot oil over a same prison, through hot oil over a prison officer. Then, on eighth May, the Southport killer, detained in HMP Belmarsh through boiling water over an officer there.

Both these terrible attacks work by radical Islamist in category A prisons. My questions are these, what steps will questions are these, what steps will be taken to isolate such prisoners from access to such dangerous from access to such dangerous substances? Will tasers be issued in substances? Will tasers be issued in category A prisons? When will stab vests be provided? vests be provided?
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None Portrait Legislation: Employment Rights Bill - committee stage (day 3) - part one
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they are and do all we can to limit their activities. One of the things that we also know is that the best way of dealing with these complex people is by trusting the staff and expertise at dealing with it. We need to make sure we give them every tool at their disposal to make sure that these people are not dangerous to themselves, to other prisoners,

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and importantly, to staff. House to be again in committee on the Employment Rights Bill. Baroness Jones of Whitchurch.

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Jones of Whitchurch. My Lords, I beg to move that the House now resolvers of into a committee on the bill. committee on the bill.

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committee on the bill. The question is that the House resolve itself into a committee upon the bill. As many are of that the bill. As many are of that opinion say, "Content". Of the contrary, "Not content". The

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Lord Lord Sharpe Lord Sharpe of Lord Sharpe of Epsom. My Lords, I rise to speak to

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My Lords, I rise to speak to amendment 71 A, 71B and 75 standing in my name. According to latest statistics, and appear employees fell by 33,000 in April, or 106,000 over the year. The number of job vacancies also fell. Wage growth has slowed. This evidence suggests that the OBR was right and the provisions in this bill are already creating net negative impact. The Chartered Institute of Personnel and Development latest survey was widely cited at the weekend was it confirms that employers confidence is at the lowest level since the pandemic.

And one quarter of employers are planning to make redundancies in the next quarter. Their economist was quoted as saying, " Employment Rights Bill is landing in a fundamentally different landscape to the one expected when it formed part of Labour's manifesto last year. " This picture was also confirmed in KPMG's recruitment and employment Confederation report. Recruitment activity across the UK continues to weaken at the start of the second quarter. The chief executive of the RAC Neil Carberry has said it is a time for real changes to address employer fears to boost hiring full stop sensible timetable and practical changes that due to redtape firms complying with the bill will go a long way towards becoming nervous about taking a chance on someone.

Last week the noble Lord called for this bill to go on vacation because we need to get it. This raft of new statistics proves his prescience. And perhaps the vacation ought to be permanent. Instead we are being asked to consider further obligations to employers changes to Statutory Sick Pay. A number of businesses across sectors and made it clear that while they support the principle of Statutory Sick Pay, they are concerned about the rate and structure being proposed. Many have called for the rate of Statutory Sick Pay to be set at 60% rather than 80% as a more sustainable and proportionate figure.

The government claims to have consulted widely with businesses, with trade unions, and with various stakeholder groups, to try to strike a fair balance. But based on the data and concerns
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Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Conservative)
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raised, we believe the right answer particularly for the initial period absence is 60%. To look at some of the other evidence, the British the other evidence, the British Chamber of Commerce 2024 workplace survey, 54% of respondents said they survey, 54% of respondents said they would be negatively impacted by the proposal for Statutory Sick Pay entitlement from day one. That is a entitlement from day one. That is a clear warning sign that the proposed structure may have unintended structure may have unintended consequences.

Further, in a survey with the London Chamber of Commerce, with the London Chamber of Commerce, 38% of firms said they would have to freeze hiring as a direct result of freeze hiring as a direct result of the Statutory Sick Pay changes. 30% expect a reduction in profits, and expect a reduction in profits, and 33% anticipate lower wage increases for their existing staff. These are not abstract figures, they point to a real-world economic decisions, that is being made in response to uncertainty and increased cost pressures.

The government has rightly emphasised its goal of encouraging people back into the workforce, particularly after the long-term disruption caused by the long-term disruption caused by the pandemic. We obviously support the same but to do so effectively we must create the right environment. And support employees when they are genuinely unwell whilst giving employers the confidence affects ability to hire. Amendment 70 1A Amendment 71 A6 to do exactly that. This amendment proposes the Statutory Sick Pay should be paid at 60% for the first three qualifying days, and raised to 80% thereafter.

This reflects the reality that short-term absence imposes different challenges on business than long- term illness. It also ensures that those who are acutely unwell and suffering from long-term conditions still receive the full financial support they need and deserve. This approach reflects the principle that incentives should be tailored are not uniform. Not one-size-fits-all. We need a more flexible and weighted approach to sick pay and one that reflects the real operational pressures businesses face while maintaining adequate protections for workers. We believe this amendment strike that balance.

It is also worth noting that during early discussions around the bill, the government itself indicated that a range between 60% and 80% was under consideration. This amendment is therefore not a radical departure from the government's own thinking from the government's own thinking I would also turn the attention of the House to concerns raised by UK Hospitality. Take, for example, the pub sector, which employs over 600,000 people across full-time and part-time roles. The latest Statutory Sick Pay proposals are predicted to add up words of 10 million to this sector, which is already struggling.

Currently, some sickness days unpaid duty employees falling below the lower earnings limit. However, stricter reporting requirements are likely to increase the costs even further. I ought to remind the House that the government's own impact assessment states, and I quote, overall, we have seen the direct increase in cost as a direct transfer to employees in the terms of sector pay and is neutral on a net basis but will improve equality. The wider impact are deemed uncertain given the difficulty of predicting behavioural impacts.

Remember, this impact assessment was conducted in a fundamentally different landscape. We appreciate that the government might not see amendment 71 with a flat 60% rate that is workable, that is why we are offering amendment 70 1A 71 AS a constructive alternative. It recognises that long-term sickness requires stronger protection whilst addressing employer concerns about short-term absence. It provides incentives for people to return to work, encourages the genuine use of sick leave and gives employers confidence to invest in their workforce.

Turning to amendment 75, as I mentioned, the government's own impact assessment has stated that small businesses will face a disproportionate cost as a result of measures. The 5 billion figure is, in our view, likely to be an understatement and it entirely relates to increased administer burdens whilst failing to calculate the knock-on effect on business costs and hiring behaviour. Particularly the impact of making it more expensive to employ people. The impact assessment goes so far as to admit that the net effect on society is, and I quote, uncertain, due to uncertainty on behavioural impacts.

What a damning phrase, that level of ambiguity is troubling, especially when the stakes are so high for the smallest enterprises. So, we make no apology for repeating that there is much too much uncertainty in this Bill, which weighs heavily on Small and medium sized enterprises. This concern extends to the proposals regarding SSP. Let me be clear, we do not oppose SSP, on the contrary, we recognise its importance. It is critical that workers have financial support during periods of sickness and that is a matter of basic decency and fairness.

However, the reason for amendment 75 is grounded in magnetism. Small business cannot plan, budget or comply. Without that clarity, we are asking them to commit to obligations that might make them structurally unequipped. We must not lose sight of the fact that small businesses form the that small businesses form the backbone of our economy, they are not large corporations with legal teams. They operate on time margins teams. They operate on time margins and the need certainty, predict ability and time to repair.

I beg to move. move.
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Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Labour)
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Amendment proposed, page 11, clause 37, leave out lines 21 to 24 and insert the words as mentioned on the Marshalled list.

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I rise to speak to amendment 72.

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I rise to speak to amendment 72. I am grateful for the support and the safe sick pay campaign and the safe sick pay campaign and Health Foundation for their help. The amendment is a probing one. From The amendment is a probing one. From a different perspective than the a different perspective than the noble Lord. To which the bill makes very welcome improvements. Nevertheless, this scheme will fail to provide adequate protection. Especially for workers on low Especially for workers on low incomes who belong to marginalised groups.

The amendment requires groups. The amendment requires detectives to review the rate of SSP prior to this year's budget to ensure that nobody is worse off as a result of the otherwise positive result of the otherwise positive changes made in the Bill. Starting with the latter, I appreciate the time that my noble friend, the time that my noble friend, the Minister, gave myself and my noble friend, Lady O'Grady, to discuss the unintended consequences of the unintended consequences of the welcome removal of the Lower Earnings Limit and the replacement by the rule that employees will receive 80% of the average weekly earnings or the flat rate SSP, whichever is lower.

The problem is, the new rule means that a small number of low-paid employees will be worse off than now. Because of the welcome removal of the waiting period, the loss will be limited to those of work sick for more than three weeks. According to DWP, we are talking about 13% of all sickness absences. I accept this is a small proportion, but by definition, we are talking about people with more serious illnesses. In the fact sheet, the DBP gives an example of a cleaner working 11 hours across five days at national living wage, takes three months off for cancer treatment, who would lose £65 in total.

In SSP. They assumed the cleaner could make up some of it in Universal Credit. What if the cleaner was married to somebody whose wages are not low enough to qualify for UC? She would lose some of her independent income, and £65 might not sound like that much, to those on decent incomes, but it can make a real difference to somebody on a low income, particularly where a worker's earnings are not shared fairly within the family. It is women in particular who are likely to lose out as a result of this unintended consequence.

I understand why the government has rejected the alternative that has been put forward. But I would ask them to look again at the proposal made by a number of trade unions and charities that the formula uses a 95% rather than 80% replacement rate. We seem to be the most straightforward way of dealing with this. I believe it is incumbent on the committee to come up with a solution to ensure that nobody is made worse off as a result of the intended consequences, of the otherwise positive change made by the Bill.

After all, the Plan to Make Work Pay, we will ensure the new system provides fair and replacement for people earning below the current rate. Turning to the rate of SSP, the final report of the commission noted that the expansion of SSP and the bill does not address the fundamental issue, Statutory Sick Pay remains too low to provide meaningful financial security during illness. Last year, the work and pension site with concluded that SSP does not currently provide adequate protection for those who most need protecting from financial hardship during periods of absence.

It consequently fails to perform the primary function providing a basic level of income protection. £118.75, it represents an earning replacement rate of only 19% for an employee on average earnings for 20% on a full- time Minimum Wage Act. One of the lowest rates in the OECD. The interim reported the keep Britain working review pointed out our European counterparts pay around 70 to 80% of an employee's wage when they ask. The low rate in the UK all too often spells real hardship and financial insecurity.

Especially for lower paid workers, women, disabled workers, and members of racially minority communities. Analysis by Citizens Advice shows that 4/5 households in the bottom 3 deciles would not be able to afford the essentials such as bills and food after four weeks on SSP. The Work and Pensions Committee noted there was almost complete agreement among witnesses to its enquiry that it was too low and not enough to live on. This included 90% of members surveyed by the professionals. Cancer charities have wanted to how far cancer patients for below the minimum standard needed to live a dignified life at a socially acceptable standard as measured by my colleagues at Loughborough University.

In a briefing, the quote a patient with leukaemia who says what people don't realise is that costs also go up when you get cancer. A huge drop in income, that he was not able to replace the benefits, the result was that he wrote he was an emotional wreck and it was a very bad time. Mind found that two in three people with a mental health program -- problem surveyed faced financial difficulties. The court mentioned in on SSP which affected the ability to pay bills, which hardly helps the recovery.

Indeed, 3/5 of respondents believe the reduction in income, as a result of receipt of SSP had a negative impact on the mental health. This is illustrated by a research respondent, quoted by the Health Foundation, if sick pay have been enough, I would have been able to return to work. But instead, my condition worsened drastically. I ended up in the last state, mental health wise, I have ever been in. Forcing me to claim PIP and be unemployed for the past year and 1/2.

The hardship associated with receipt of SSP, particular need for those on low incomes can result in present years, people coming into work when sick, where it is contagious, spreading sickness. But for them, their workers and employers. Present years and cost businesses 44 days lost productivity per year. Poor sick pay and minds the objective of economic growth. Analysis by WPI suggests improve SSP could boost the economy by over £4 billion per year. And reduce the pressure on the NHS.

The Health Foundation ones that inadequate SSP can create an incentive for some workers to move into the Social Security system without a clear route back into work. The opposite of what government policies how to she. They point out that when workers are financially supported during sickness absence, they are more able to recover, take part in rehabilitation and return to work safely, and sustainably. The implications of present years am visible during the pandemic. Which, as the Minister told the committee last week, exposed how precarious work and life are for those on low incomes.

Many forced to choose between the health and financial hardship. Far too many people felt that they could not afford to stay that they could not afford to stay at home when they were infectious. Contrary to more generous sick pay for better health outcomes. We are told by the experts, it is only a matter of time until the next pandemic. One way that we can prepare is by ensuring that SSP is adequate. So, my Lords, this amendment asks government to look again at how to ensure nobody loses out as a result of the improvements to SSP and undertake a quick review of its levels.

Welcomed by the wide range of charities, the TUC, and major trade unions, as well over 100... Over 180 parliamentarians, all of whom support the safe sick pay campaign. The New Deal for working people says unequivocally that Labour will raise Statutory Sick Pay. The amendment built on the Ricoh assurance in the Commons from the Minister that the government would monitor how effectively the bills performed will support employees. We do not need monitoring to tell us that SSP is too low.

Especially in the recent enquiry. The commission for healthier lives called for a review that will result in an increase of SSP to a fairer level by giving businesses the time and support they need to adapt. I do hope that my noble friend, the Minister, will be able to provide Minister, will be able to provide
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Baroness Coffey Portrait Baroness Coffey (Conservative)
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I would like to speak to amendment 73 tabled in my name, and it is regarding SMEs and an SSP rebate scheme. I have made myself a drafting error by calling it four days, it should have been three days. My Lords, occupational health is a key factor both in helping people to stay in work, but also in trying to prevent some of the illnesses but also getting back into work quickly. It has been for some time a key part of the strategy for successful business to do that.

I'm also conscious that particular SMEs are not always well displaced currently to access. That is why more recent strategies, that expanding that capability has been a key part of DWP, which the present administration has continued. Sickness rates significantly lower in the private sector compared to the public sector. But what is common to both is there is an increasing prevalence of the primary reason for people being off sick due to mental well-being. I am conscious that this is not an easy situation to often challenge or interact with if you don't have the experience to do that.

That is why increasing occupational health is needed. Why is occupational so relevant to this? It used to be the case that Statutory Sick Pay you could reclaim from the government the amount of money that you may have paid out, used to be able to get a rebate for that Statutory Sick Pay element for businesses. I know that because I used to fill out the claims myself when I was working in industry. Over time that had been whittled down. But it was finally abolished in 2014.

Instead though what the government did was create a new health and work service, which was designed to be referred to by SMEs for people who had been ill for a few weeks. Again, as almost a provision operated by government, facilitated by government. One of the challenges is this is continuing to be an issue. Many particularly small businesses believe, certainly in the submissions made to me, that they are worried about this starting from day one of people being unwell.

As a consequence, I do think it is important that we should investigate the opportunity to get a rebate scheme for SMEs to try and keep the status quo as it is today. It is in the interests of government support SMEs when we are thinking, as we have already heard, the statistics show that unfortunately payroll employment is falling full stop I was very pleased in office that we actually saw it increasing, and indeed, I am certain that, in wanting the government to succeed in its ambition to get 80% employment rate that it needs SMEs to be taking on people to work.

For me, this Bill, I have already explained, I don't think it will help with that but I think one modest way to go towards this in alleviating some of the issues would be to introduce a straightforward rebate scheme for

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SMEs. I want to speak in support of my
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Lord Davies of Brixton Portrait Lord Davies of Brixton (Labour)
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I want to speak in support of my noble colleague Baroness Lister, in noble colleague Baroness Lister, in support of more being done in terms of Statutory Sick Pay. Of course I welcome the government's commitment to strengthen Statutory Sick Pay, by removing the Lower Earnings Limit, and removing the waiting period. But government must go further to ensure people with mental health problems have a secure safety net when they need time off work. And a pathway back into work when they recover.

The UK has one of the least generous sick pay schemes in the OECD in terms of this. It forces people to remain in work when they are unwell which risks them becoming more unwell and eventually falling out of work. Because Statutory Sick Pay is there, people who rely on it are often remaining going into work when they are unwell. This risks them getting more unwell to the point that they fall out of implant altogether. So we need a sick pay system that provides real security.

Also a sick pay system that is more compassionate, and that gives people the time they need to get better and supports them to return to when they are ready. Reforming Statutory Sick Pay is beneficial to the economy, to businesses, and to people with mental health problems. As my noble friend has emphasised, presenteeism, going to work when unwell, is costing the UK economy £24 billion a year, figures induced by Deloittes. It reduces productivity and business competitiveness, as well as aggravating a person's illness.

Introducing a flexible Statutory Sick Pay model which allows for partial payments alongside wages would help people to gradually return to after a period of sickness, or allow people to reduce their hours when they need to without being signed off completely. Not only is this beneficial for the employer, as employees are able to return to works sooner, but it also keeps the employee connected to their workplace, and reduces the likelihood that they will fall out of employment altogether.

Extending the length of Statutory Sick Pay being paid from 28 weeks to 52 weeks, will enable more people to stay in employment, reducing rehiring costs for businesses, and preventing people falling out of employment and needing support from employment and needing support from the benefits system. Ultimately we need to see a higher level of need to see a higher level of Statutory Sick Pay, and I see no reason why, when you are sick, you reason why, when you are sick, you should get any less than the National Minimum Wage.

National Minimum Wage.
16:08
Baroness Noakes Portrait Baroness Noakes (Conservative)
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... The changes to Statutory Sick Pay in this bill is the impact on smaller businesses, which is why I support the amendments in this group in the names of my noble Friend lady coffee and Fox which provide for coffee and Fox which provide for rebates. I refer to this because it clearly undoes the harms that this bill will cause. I could not find very much data on how much businesses actually pay in Statutory Sick Pay.

I suspect that unless an employer is unlucky enough to get an employee that has 'Long-duration energy storage: get on with it' sickness, most will be paid relatively little at present because the absence is less than four days. Most sickness absence, that is what the data does show, are for minor illnesses. These are unlikely to exceed three days. The average days lost per worker per year in 2023, the most recent date I could find, was just short of eight days.

Amongst small and micro businesses, that falls to around five days. Extending that days for which payment is made is likely to increase the number of days lost to sickness, as the current incentive to work if the illness is mild will simply disappear. The government say they have no idea what the behavioural impact of the changes will be, whether they will be positive or negative. But I would be prepared to bet that there will be far more short duration absences which will qualify for Statutory Sick Pay than they were before.

If I am right that most SMEs don't currently pay much in the way of Statutory Sick Pay, the changes in this bill will straightforwardly increase their costs. An average small business, of between 10 and 49 employees, has about 20 employees. That means the average for a small business will be paying for at least 100 days of sickness which they don't currently have. And that would cover, it would amount to around £2000 in additional costs each year.

Even if no additional sick days were taken which I doubt. That is not a huge amount per business, but it does add up to many millions of does add up to many millions of pounds across the whole economy. It also of course comes on top of the jobs tax and are significant increases in the National Minimum Wage. Which leads me to the likely real consequences of this change on top of the others. And put simply, SMEs will not be hiring workers unless they absolutely have to.

We can already see the remnants of this from the survey of small businesses, and in weakening labour market, my noble friend gave an up-to-date view on that, and this will only get worse. Furthermore, all of those groups which we as a nation wants to get back into work, in particular those who are long-term sick, will simply not be attractive to employers. Any hint of an illness record in a job applicant's background will count against them going forward.

Because no employer will want to take on the additional costs that would automatically come with that employee. I am sure I don't need to remind the committee that SMEs employ nearly half of the private sector workforce. Reluctance to hire amongst SMEs will kill growth, and will kill opportunities for many of the groups that we need to be employed in this country. to be employed in this country. There is a simple way to solve this There is a simple way to solve this problem, and it is set out in Amendment 73, 74, the government Amendment 73, 74, the government would be wise to go down that route.
16:12
Baroness Lawlor Portrait Baroness Lawlor (Conservative)
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I rise to speak in support of

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I rise to speak in support of Amendment 71 and 71A and 71B in the name of Lord Sharpe of Epsom and to name of Lord Sharpe of Epsom and to support Amendment 73 in the name of support Amendment 73 in the name of Baroness Coffey an amendment 74 brought by Lord Fox. Lord Sharpe's amendment proposed a sensible modification to clause 11. And strike a more affordable approach strike a more affordable approach for a business paying the employee full-time not worked as well as for the compliance and record-keeping involved.

I say more affordable rather than fair because many rather than fair because many businesses, particularly small and micro businesses, as we continue to micro businesses, as we continue to hear at committee, will struggle to hear at committee, will struggle to stay afloat and keep in business, given the juggernaut of additional costs and burdens, increased obligations imposed by this bill. Including those on, in this clause and of course the previous clauses that we have discussed. In clause 11, such costs are to be imposed for those below the Lower Earnings Limit as we have heard.

These will add to the extra costs paid by employers. They will potentially open for the problems raised in the impact assessment. The modelling for which suggests a rosier picture for business and the available evidence warrants. But it also raises questions of behavioural response. Indeed, this consideration was a fundamental principle addressed in the welfare state proposals by Sir William Beveridge in his blueprint in 1942. With the original National Insurance act framed as it contributory scheme with strict conditions on benefit to avoid creating perverse incentives.

Here, the impact assessment, and this measure which models outcomes on the basis of a variety of factors including some unproven assumptions suggests that while there is evidence suggesting overall sickness absence may be reduced, but on the basis of evidence considered from other countries says, it is possible that regulation changes induced behavioural response. And that studies from other countries have found that the incidence of sickness absences are higher when sick pay is more generous. There could be an increased number of sickness absence days taken due to improved financial protection.

We can read that in whatever way we like, and we have heard different interpretations of more generous Statutory Sick Pay. I think it is incumbent on government to consider a return to some of the original intervals in the National Insurance system in this country, and to think further about not and to think further about not There is one of the reason why There is one of the reason why I would like to support these amendments, clause 11 implies those low the lower earnings level can do as well as those on higher earnings without improvements in their skills and productivity levels.

The government modelling has been based on productive at present rather low skills level. That premise, and the overall... That overall reflected by this Bill is misguided in that additional cost to be borne by employers alone are to be paid for without productivity gains. And with no regard for the wider context of the overall economy. Or its buoyancy. Rather, the bill, including clause 11, locks the UK labour market into being the lowest productivity economy amongst similar, G7 economies.

In the lowest productive output per hour for the UK economy. Not only has the UK disproportionately hired no skilled labour and people earning low wages, but in topping up benefits, including Statutory Sick Pay, T levels or for higher earners, it offers no incentive to improve skills. Such an approach in the UK labour market means lower earners by failing to encourage incentives to Aspire higher, improve skills and education and ultimately lead to their being... They will ultimately not be employable.

I will not go through the GDP rates per hour, but they make depressing reading, with the US earning the highest GDP per hour, in purchasing power, and France and Germany earning more than the UK. The UK productivity was around 19% lower than that of the US. We improve productivity by having an incentive-based pay scheme and that must be based on higher skills and higher aspirations. I support the amendment for these reasons because not only because they would mitigate, slightly, the burden on business, and could mitigate against potential behavioural changes, I would go faster than my noble friends amendment and argue that a lower proportion differential for the Lower Earnings Limit should be built into the measure as an incentive to low skilled employees to improve their earning capacity by training and education.

On my noble friend's amendment, 73, and amendment 74, a rebate scheme, I support these. Cover up for lost income for sickness goes back historically 1911. It was again, enshrined in the blueprint by beverage. With elements of contributing social insurance then in existence, extended right across into a single system of contributing insurance under the national insurance act. Statutory Sick Pay was based on a three-way contributory benefit paid by the employer. The employee and the taxpayer, for the best part of 100 years.

To help working people with income to cover sickness. Throughout the period, the employee contribution arrangements were designed as part of a three-way scheme to promote incentive, maintain a link between contribution and benefits and keep costs and claims under control and link benefits to contribution. As the employee element was eroded and in the 1980s and 90s, during the twists and turns of attempts to control escalating public expenditure, limits were introduced, and we have heard about the limits from my noble friends, Baroness coffee.

They were whittled down between 1983, to 1991, I will spare you the triggers, from 1994, we arrived at the 80% investment rate. 100% commencing after four weeks, instead of six weeks. In April 1995, that was abolished, but there was a percentage threshold scheme put in its place. But all the time, it was recognised that employers were compensated for high levels of sickness absence, they could recover part of Statutory Sick Pay costs, when the had a specified percentage of total class I.

The amount reimbursed being the excess of Statutory Sick Pay paid above the percentage threshold. So, for these reasons, I support the amendments. And in lieu of the fact that contributions continue, and have in the retrograde manner, been increased considerably under the NIC act, which went through this House earlier this year. Increase disproportionately with the damage already seen to the labour market, which we continue to hear about and businesses who are more reluctant to employ the very people we need to employ, I suggest it is fair and proportionate that there should be a rebate as proposed in the modest amendment of my noble friends, and the more ambitious one of Lord Fox.
16:22
Baroness O'Grady of Upper Holloway Portrait Baroness O'Grady of Upper Holloway (Labour)
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I write in support of Lady Lister and amendment 72, and I add my thanks to the safe sick campaign, the Health Foundation and other organisations. I heartily welcome the commitment to strengthening SSP by removing the Lower Earnings Limit and the waiting period. Nationally representative survey, conducted for the TUC, found that around half of employees get their full pay, as usual, when sick. But around 28% were forced to rely on SSP alone. It also found a clear, class divide.

When it comes to who gets what. Eight in 10 of higher earners, over 50 grand per year, get full pay. Compared to only one third of lower earners. The pandemic exposed just how precarious life is for those in insecure, low-paid work. We do not know how many preventable illnesses were caused by people struggling to work and spreading virus because they could not afford to stay at home. But we do know, as we heard, forcing people back to work, when they are ill, is bad for workers and bad for business, it puts pressure on the NHS, and it is costly for the economy.

I am very grateful to the Minister for taking time to meet Baroness Lister and myself to discuss our concern that the formula adopted by the government could leave low-paid workers, who are just above the Lower Earnings Limit, worse off. The DWP's answer, has been that the abolition of the working days ensures that for the first three weeks, those losses have been offset. Surely the policy intention of the government and commitment to abolish the waiting days is not to make up for losses caused by its own formula.

Surely the policy intention should be to ensure that every single worker, who relies on SSP, is in fact better off. And surely we need to protect those on long-term sickness, who are, for example, receiving cancer treatment. I note the government's concern that the formula must be designed in such a way to avoid workers getting more in sick pay than they would in wages, and to avoid a cliff edge. I remain unconvinced that it is beyond the wit of DWP to come up with an approach which both protects that position, without penalising a group of low-paid workers.

Secondly, as we have heard, this amendment seeks a review of the rate of Statutory Sick Pay, as the Resolution Foundation has pointed out, unlike many, many other European countries, the rate is not linked to earnings. Apparently, at £180 -- £118.75 p, SSP equates to 27% of the National Minimum Wage. In 1999, SSP was equivalent to 43% of the National Minimum Wage. That is a big drop for a decade and more, SSP has failed to keep up with the cost of living or increases in the living wage.

The work and pension Select Committee has confirmed that the SSP rate is not enough to live on and the Covid public enquiry hearing in December 2023... Matt Hancock was quizzed by Sam Jacobs, who is counsel for the TUC, and former Health Secretary agreed that the rate of SSP should be higher. How could he argue otherwise, when the UK has languished at the bottom of the OECD league for Statutory Sick Pay under the previous government and when we know that such a low rate of SSP is a danger to public health.

Now, I understand that perfection must not be the enemy of the good. But an SSP rate that works out at around three pounds per hour is some way short of either perfection or good. This amendment implicitly recognises that this wilful legacy of neglect, tackling it, will not be achieved overnight. But it would be welcome if the Minister could reassure us today that both the formula and the rate of Statutory Sick Pay will be reviewed before the Autumn Budget and rightly so.



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My Lords, I would like to start

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My Lords, I would like to start by declaring interests, I am an employer, found on enlisted business, mind gym, a behavioural business, mind gym, a behavioural science business and an expert in science business and an expert in corporate training, to improve employee well-being and productivity. I am also a productivity. I am also a commissioner at the EHRC. I rise to support the opposition amendments in
16:28
Baroness Cash Portrait Baroness Cash (Conservative)
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support the opposition amendments in this group, 71, A and B, 70 -- 74, A and B and C. I want to make clear that I understand all of us here, everyone here is driven by compassion for those who need protection. And I pay tribute to the speeches from the benches opposite. And from my noble peers. I am very concerned about these proposals. And I am grateful to Baroness O'Grady for drawing attention to the Resolution Foundation report on this because they have identified that some of the points, which support the amendments on this side of the House, and I will return to this, the government has said come on record, it wants growth.

We support that goal. It wants businesses to succeed, we support that goal. It also wants... I said, it wants to reduce the number of people out of the workforce on long-term sickness. Currently, 2.8 million. We support that goal. What we do not understand is how a nurse the government believes that this legislation, and these proposals, are going to achieve any of that. They are based on compassion, I have no doubt, but they are pursuing a culture of incapacity and dependency that will impede the stated aims.

I will explain why. Because we are referring to SSP and not to long- term sickness. But they are related to each other in our culture. Our sicknote culture in Britain today. Mental health, now accounts for 50% of all new sickness claims. Bear in mind, when we are talking about SSP, we are talking about 50% of those being mental health issues. What qualifies? A diagnosis of stress? No root? Burnout? All of these are signed off on a GP sicknote. They are transient, there is confusion between transient, life, because -- life difficulty and clinical Simon Wessely has put it like this.

We are apologising normal human experience, grief, worry, frustration and now all treated as medical conditions. The new statutory sick proposals run against all of the scientific evidence, in which I have declared I have been immersed for the last 10 years. Also the sociological data from other countries, which show that what is intended by this act isn't going to be achieved by the way it is being framed. I appeal to my noble peers on all benches, to please, if it is helpful, I will share the research, I will happily meet and talk with any member of the government benches.

As a number of neuroscientists and psychologists, over the last 20 years, the last five, have identified what is happening, why we have this massive increase in people being sick, long term. Professor Lisa Feldman Barrett, a leading neuroscientist has shown that our brains are due don't them from context, she tells the most extraordinary story of a young teenage girl who lives in a tribe of the word and she is in a culture and I am not for a second advocating this, it is such a striking story about how the brain works.

She is in a culture where women are treated very badly, the women all think they are pests. That women all think they are pests. That is how they deal with it. They go about their lives and she is getting good grades at school and she is sleeping night and doing fantastically well, to succeed in her life. She then watches a Netflix documentary that tells her about domestic abuse. I concepts, which in this tribe had never worn fruition. It may well have done so, but in the context of the documentary, domestic abuse was shown to cause certain things.

Guess what, her exam grades dropped. She stopped sleeping, she became very, very ill. Her brain suddenly predicted, from the different context that she should be feeling differently to how she was feeling before. That is what happens. When we set the cultural context. I am excited, if I am, my husband would have words. We are excited about an event, we are anxious or taking an exam. The same physiological measures show up, on the data. We are predicting the emotion differently.

This is what is happening, in our workplaces, in our lives, up and down the country and we are destroying the future of this country and levelling it with debt, further young because we are not addressing this and we are worsening it with these proposals, facilitating it. Daniel Kahneman, I can go on and on, with the research. He has shown a behaviour is shaped by a framing disengagement, if disengagement is framed as a safe, or sanctioned, or subsidised, it becomes a default under pressure.

I go back to the Resolution Foundation's report, as referenced by Baroness O'Grady, what she didn't mention there is that when there is more generous in Statutory Sick Pay, there is more absence. When, in other countries, where they have a day one writes, they have reduced percentage rate of payment, to ensure they balance that tension between going off sick, unnecessarily, for reasons they do not need to use. Martin Solomon, also talks about learnt health and was that when people face stress with the agency or structure, they stop trying, even when recovery is possible.

Belief in our ability to function is critical to actually doing so. I can go on and on. The evidence is so clear that if we demand nothing, we will get nothing. To be very clear, this is mental health we are talking about and contextualising mental health. I know it is not what the opposition benches would like to hear. I urge you to listen. My opposition, not the government benches, thank you. So the government benches and may not want to hear this, but I am urging you to think about what you are trying to achieve, with this legislation and what the outcomes are likely to be.

We do have to immerse ourselves only in the academic research, because there is a sociological data, proof of what I'm saying, from looking at other countries. In Sweden, they did, what this government is proposing to do. They made generous sick pay provisions and reforms and it led to a rocketing absence level, until they had to go back in reform again. Introducing a tightened eligibility, reimposing assessments and setting a fixed sick leave durations. That, then is what these absence levels came down, no increase in hospitalisation.

In Denmark, where hospitalisation. In Denmark, where encouragement to return to work is filled into sick leave, requiring people to stay connected and take part in phase returns, meant outcomes are far better than in the UK and dependency is lower. And in the Netherlands, employers, only get support for sick leave, where they are required to keep really engaged and have proof that that is part of the whole system. These new additional entitlements aren't being kind to people. They are not being kind to a generation of young who are watching economic inactivity in their homes.

Of course there will be people that need to be a specifically categorised with physical illness. Of course there are people who are really very sick. It with a 50% mental health sickness rate, I urge the government to reflect again, on these clauses.
16:37
Baroness Smith of Llanfaes Portrait Baroness Smith of Llanfaes (Plaid Cymru)
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I rise to speak in support of Amendment 72, in the name of the noble Baroness, Lady Lister and I with the noble Baroness, Lady O'Grady signed it. This would require a review of the rate of Statutory Sick Pay and the head of his Majesty's government Autumn Budget, 2025. It requires the Secretary of State to determine, following that review whether the rate should be changed, alongside a written statement, setting out the reasons over that determination. I think it is important for us to remind ourselves about what this amendment entails.

As my noble Lords are aware, statutory sick pay is a government scheme, requiring employers to provide a most employees, in the UK that are absent from work, due to sickness, with a minimum level of pay, during that period of absence. Statutory sick pay or SSP numbers £118, 75p per week, following an increase last month, which an eligible employee can receive the four days if they are ill and not working, except for the first three days of that sick leave.

To be eligible, one must be classed as an employee and have done some work for the employer, and at least an average of £125 per week, previously £123 and had been ill for more than three days, in a row. It is only on the fourth day that they receive SSP. The scheme, as it stands is ineffective and causes hardship. And as we have heard, from the noble Baroness, Lady O'Grady, according to the tea you see, 28% of employees receive only basic SSP, when ill.

Meaning they are reliant on this very small amount during that period of illness. They add that there are one point one union workers earning below the previous SSP amount of £123, per week, who are not even eligible for SSP, with Considering also the penalty of the three-day delay, until an eligible employee can claim SSP, it is clear that reforming SSP is both necessary and overdue. I therefore welcome the provisions under the Employment Rights Bill that we see SSP payable from the first day of incapacity to work, by way of clauses 10 and 12.

And the removal of the lower earnings limit that is the requirement to earn at least £125 per week, through clauses 11 and 13. Clauses 11 and 13 of this bill also certain legislation that the rate of SSP would be set at the lower of £118.75, or 80% of the employees are normally included earnings. That payment is extremely low, by international standards, as we have heard, like many laws, it is one of the lowest rates in the OECD.

And if you were to divide this amount, by a typical 40 hours worked, by full- time employees, in a week, this provides under 3 pounds, per hour, to employees that are ill. Of course many workers, will work more than 40 hours per week, decreasing this hourly amount even further. In the context and I think we all must remember this, in the context of rising housing costs, food prices, energy and household bills, such a small payment is adequate to meet basic living standards.

And I ask your Lordships' House macro, do we believe that those people can survive on a 3 pounds an hour. I think that is an important question that we must consider as part of a when we look at this amendment. In fact, in the context of Universal Credit, the Joseph Rowntree Foundation estimates are that to afford essentials, the adults, in a household, a single adult requires at least £120 a week and a couple £205 a week, just for the basic essentials, alone.

It is clear that a review of the adequacy of the SSP rate is crucial, to ensure people are not plunged into poverty, just for becoming ill. Which is something that happens to all of us. Subsection 7, under amendment 72, makes provisions for the Secretary of State to ensure that no employee receives less Statutory Sick Pay than they would have received, before this bill is enacted, as a result of changes, under clause 11 this is important, because according to the TUC, and 80% replacement rate, as in the bill would see 300,000 workers entitled to a lower 300,000 workers entitled to a lower rate of SSP, than currently.

Many of these individuals work for multiple employers, work part-time and received no wages. And according to the save the sick pay campaign, three quarters of those impacted will be women. Disabled people will be disproportionately affected and almost half are between 20 and 54. Using the SSP amounts in place before April, the save six pay campaign outline an example of an employee who would now lose out. That employee working for multiple employers, earning £123 a week, with their employers would have received £116.75 a week, other Statutory Sick Pay, because they earned above the Lower Earnings Limit.

Following this bill as it stands, that same employee would see a 16% reduction in their entitlement and receive only £98 a week, as this would represent 80% of their earnings. Many workers, particularly those in low paid positions already struggle to avoid the shortfall caused by SSP, when ill. And increasing that shortfall will make it more unlikely that workers will have adequate savings to mitigate the loss in their income. Subsection 7 of amendment 72 provides a way for the Secretary of State to rectify the situation and ensure no one is worse off as a result of SSP changes, as part of this bill.

It is vital that his Majesty's government does not intentionally or unintentionally cut sick pay for hundreds of thousands of workers. So I will now briefly turn to some of the other amendments in this group and also some of the debate that we have had so far as part of this group. Amendment 73, in the name of Lady Baroness, Baroness Coffey and amendment 74, in the name of Lord Fox, call for the establishment of a scheme for reimbursement of Statutory Sick Pay course, incurred by companies, with fewer than 250 employees.

This is an interesting proposal, as we have heard from Baroness, Lady coffee and we are yet to hear from the noble Lord, Lord Fox. I look forward to hearing and the Minister's response in terms of the practicalities of such a proposal. And, just one other thing I would like to note as part of this debate is I feel very strongly that the mental health is the health and this also isn't just to do with those facing mental health conditions, at all. This is wider than that.

I think it is important just to note that this is about all workers who have been signed off of work due to lots of different types of reasons, in terms of why they might be ill from work. That does include mental health. Of course the aims of these amendments are different to that of amendment 72. In them and 72 would help address gaps in the bill, as it stands on the matter of adequate sick pay for workers. Gaps that cause some concern, in relation to the consequential effects on a low And I hope the Minister, when responding to this debate will address the concerns that I've highlighted, in my speech.

Namely the adequacy of the rate of SSP, as set out under this bill. Her assessment of the effect on low income workers, without relying on the welfare system to offset that effect. And if his Majesty's government will commit to a review of SSP rates, so that workers are not punished, by measures, as part of the bill, expected to strengthen their workplace rights. Thank you

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very much. Very brief. I think there is actually been some excellent debate actually been some excellent debate in this group and I wanted to ask for some clarification, maybe from for some clarification, maybe from the government, in particular, about something I'm confused about. I'm something I'm confused about. I'm something I'm confused about. I'm I think the noble Baroness made a I think the noble Baroness made a really useful, insightful contribution to this discussion that contribution to this discussion that brought another layer to it because I think there is a danger of us talking about these discussions technically on the one hand and also in a rather old-fashioned way, and I in a rather old-fashioned way, and I think now there is a lot more evidence and new phenomena we need evidence and new phenomena we need to take into account.

The reason I wanted to think about this amendment wanted to think about this amendment is because it's looking at the

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impact on... I'm sorry to interrupt. We are

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not debating 74A at the moment. I've got the right group, I just

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I've got the right group, I just said the wrong thing. It's the wrong group... Are right, thank you.

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group... Are right, thank you. I think -- I thank all noble Lords have spoken in what has been a Lords have spoken in what has been a very interesting debate. We close last week with a couple of de-
16:48
Lord Fox Portrait Lord Fox (Liberal Democrat)
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last week with a couple of de- grouped Conservative amendments and I promised to speak about Statutory Sick Pay. Last week, noble Lords spoke firmly against the government's proposed changes. I think, for my part, I have seen evidence that businesses are arguing strongly for the status quo or to the threshold. But I'm not a behavioural scientist -- while I'm not a behavioural scientist, I can read through. The party with the majority in the Commons have made it clear where they stand on that issue and that has been reasserted with some of the stronger comments we heard from the benches opposite.

Businesses, I think, have drawn the same conclusion. Most businesses I have spoken to are seeking ways to ameliorate this rather than eliminate it, which is probably unlikely. I was interested to hear the noble Lords from the Conservative frontbench speak to 71A and B. Their version of amelioration seems to be to reduce the amount of SSP or at least severely limit the amount of SSP. We heard a different story from the noble Baroness Lister and the noble Baroness O'Grady who set out the reasons why SSP is important and the rate is meaningful.

To contextualise poverty, we are talking about the poorest people who are working people but still extremely poor. It seems to me difficult to overestimate the generosity of this scheme, but that appears to be what I've heard from several of the -- several on the Conservative benches. This is a very modest offer and I think the Baroness Lister with her statistics set that out, as did the noble Baroness Smith. Before I talk to my own amendment 74 and 73, I will just deal with the others.

The noble Lord Sharpe and Lord Hunt called on amendment 75 for a reviewer to report within two years. I mentioned there is a subsequent group, which has also impact assessment in it so not sure where were debating them separately. Rather like Baroness Fox, I'm going Rather like Baroness Fox, I'm going to mention 74A to C. There is a slight mismatch of timings. Amendment 75 is after two years, 74 B and C there is a slight mismatch of timings.

Amendment 75 is after two years, 70 6:04 months and 75 after one year. There need to be impact assessments whatever your Lordships site. Perhaps, it will be a more systematic calendar than the one suggested. There needs to be pre-emptive impact assessments. It would be good to hear the Minister spell out the detail of the impact assessment of business on the current proposed measures. If, as the Minister says, the cost will be relatively modest, than the cost of amendment 73 or 74 would also be relatively modest, which takes me to the point in question.

As we've heard very eloquently from the noble Baroness coffee, she and I have come with very similar suggestions in terms of amelioration, which is what I was talking about earlier. And like the noble Baroness Noakes, I prefer the noble Baroness's version. We need to sit down and work out a way whereby a rebate scheme can be introduced. We care deeply about SMEs. They drive a huge part of our economy. This is a way of making sure they do not get disadvantaged as employees and get what they deserve as SSP.

I hope that the Baroness will be able to make a positive noise about that and we can sit down and have that conversation. I think what we've heard today is that SSP is absolutely vital for a section of society who are themselves already massively disadvantaged. I do not think we should be drawing lines and pushing them further down. We should be finding ways of making sure that they are not disadvantaged even more. At the same time, we should find ways of making sure that our SME sector is not also disadvantaged.



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My Lords, I think we've had a really good debate on these issues really good debate on these issues and I hope that I can do justice to and I hope that I can do justice to the questions and points raised. If I begin first with amendment 75, tabled by Lord Sharpe and Lord Hunt on independent reviews into the on independent reviews into the effects of SSP reforms on small and effects of SSP reforms on small and medium enterprises.

As the noble Lords will be aware, the government has already undertaken a regulatory has already undertaken a regulatory impact assessment, which was published on 21 November, 2024, and published on 21 November, 2024, and can be found on guv.uk. -- gov.uk. can be found on guv.uk. -- gov.uk. In the regulatory impact assessment, the government estimated that the cost of delivering these measures cost of delivering these measures will cost businesses a modest £15 extra per employee. Can I assure noble Lords that the government remains committed to monitoring the impact of these SSP measures.

We intend to conduct a post- implementation review of the measures in the Employment Rights Bill within five years of implementation. Additionally, the Department for Work and Pensions conduct regular employer and employee surveys and will continue to do so, providing further monitoring of the impact of SSP changes on a range of employers and employees. I would also draw attention to the Keep Britain Working review. This independent review will consider recommendations to support and empower -- enable employers to promote healthy and inclusive workplaces.

It will support more people to stay in and return to work after periods of sicknesses and help people with sicknesses and conditions. Whilst I'm on the variety of sicknesses that people on disability and care. -- incur. Our proposals have to be seen in the wider context of the bill. What this bill is intending to do is to improve the experience of employees at work so measures like taxable working, guaranteed hours and protection from harassment could and we believe will reduce stress at work, potentially leading to fewer incidents of burnout and therefore if you were related absences.

First, that is an important challenge that we intend to monitor. If I now turn to amendment 73 in the name of Noble Baronesses Coffey, this would introduce a rebate scheme to reimburse SMEs. I think it was four days but she clarified she meant three days as her intention. I thank the noble lady for her interest in SSP and I appreciate her extensive knowledge and experience with this area as the former Secretary of State for Work and Pensions. As previously mentioned, regarding waiting days, the changes we are making to SSP will cost businesses around an additional £15 per employee.

A relatively modest amount in comparison to the benefits of reduced present ESM and the positive impact this will have on the West paid embers of society -- presenteeism. We previously delivered rebate schemes. This was abolished duty SMEs under using it and feedback that the administrative burden was complex and time- consuming. So I would suggest that a rebate scheme that only covered the first three days of sickness and absence would also be quite administratively burdensome, both for businesses to claim and for the government to process.

Previous SSP rebate schemes also did not encourage employers to support their employees. We know that employers having responsibility for paying sick leave helps maintain a strong link between the workplace and the employee, with employers encouraged to support employees to return to work when they are able. And if I then stick with the team -- theme of rebate schemes and return to Lord Fox's amendment 74. This rebate scheme... I would reiterate the point I made earlier about SSP changes and the experience of previous rebate schemes.

I have to say that I would agree with the noble Lady that we have moved away from the Average System of social
16:59
Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
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insurance and the cost and the insurance and the cost and the -- Beveridge system. I -- Beveridge system. I don't -- Beveridge system. I don't believe a rebate is the best way to support SMEs at this time. We will be SMEs at this time. We will be considering the findings of the aforementioned review which is expected to produce a final report expected to produce a final report of recommendations in Alton. The noble Lord Lord Fox through a challenge to me which is we should challenge to me which is we should keep talking about this and, of course, I'm very happy to do so.

course, I'm very happy to do so. Turning to amendment 71A and 72B Turning to amendment 71A and 72B There was no clear consensus from stakeholders on the percentage rate. stakeholders on the percentage rate. The government believes that the 80% rate strikes the right balance between providing financial security to the lowest paid employees when they need to take time off work to recover from illness and limiting the cost of business. Otherwise, as the noble Lord Lord Fox says, if we are not careful, we will be penalising the very poorest in our society.

And crucially, the total amount saved by businesses if the rate was set at 60% compared to 80% was wrong is around 30 million. This is a pound difference per employee per year. Specifically, on the noble Lords amendment 71 A to set the rate at 70% for the first days, the amounts saved by businesses become even smaller, with the difference in cost being a matter of pennies. Given the minimal savings for businesses, the complexity for employees and administrating different rates is difficult to justify.

The noble Lady Baroness Noakes asked about the data we had on the duration of sickness absence. The DWP employee survey from 2023 showed that 64% of individuals don't take any sick 's absence at all and of those that did, 87% have absences of three weeks or under. Therefore, for short-term absences, the removal of waiting days is likely to offset for the 300,000 who could earn less If I now go on to amendment 72, this has been tabled by my noble friend, Baroness Lister of Burgess said.

As I have just said, it is designed to balance support for the employee with the cost of the employer. Lord Lister, Lord Davies, Baroness O'Grady and the noble Baroness Smith raised a more fundamental challenge And indeed made very compelling cases. As a noble Lords porno the Secretary of State for Work and Pensions already carefully reviews and sets the rates for Statutory Sick Pay, each year, as part of the Social Security rating process and this rate is agreed by Parliament. The formula and the rate of SSP, if we do change it, will be reviewed throughout this process.

I would also say to my noble friend Baroness Lister and others that removing the waiting period means that all employees will receive a £60 extra at the start of their absence, rising to £150, if they work two days per week, compared to the current system. We also know that increasing the rate of SSP substantially increases costs, for example a rate of 18% of the National Living Wage, and cost businesses an extra £1.3 billion, a With the changes were already making throughout this bill, we believe that the current rate is fair and achieves the right balance between providing support for employees, whilst minimising the cost to employers.

Now I understand my noble friend has included in her amendment provision for ensuring that no employee will receive less SSP as a result of these changes. This was the point raised by Baroness That by removing the waiting period, no employee will be entitled to less SSP, for the first three weeks of sickness absence, which from a survey of UK employees represent 80% of all sickness absence. In fact the vast majority will receive more than they do now, as a result of these changes.

So I can assure the noble Lady, Baroness Smith, that we are not cutting SSP, for hundreds of thousands of workers. Baroness O'Grady, challenged the DWP to come up with a more comprehensive formula. I can assure her that this has been looked at in detail and I know she knows, because we discussed it when we met and produced a fact sheet to support this. It is more complicated than we would like to think. And the truth is it has to be a scheme that is simple enough to be easily implemented by employers.

I hear what she says. I wish it was that simple, but unfortunately it isn't. However, those who additionally, who need additional financial support, whilst off sick may also be able to claim more help through the welfare system. DWP recently published a fact sheet, which I hope my noble friend has which I hope my noble friend has found useful. I can assure my noble friend that the government does of course remain committed to monitoring the impact of the changes we are making, to strengthen the statutory sick pay and how the SSP is used by employers and how it supports employees, including a lower paid employees.

So, this is an issue that will be kept under review, but My Lords, in the meantime, I hope the amendments can be withdrawn.
17:05
Lord Sharpe of Epsom Portrait Lord Sharpe of Epsom (Conservative)
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I would like to thank the noble Lady the Minister very much indeed for her response and indeed all noble Lords for their contributions to what has been a very thoughtful and I think a valuable debate. In particular, noble friends Baroness Noakes, Baroness Coffey, Baroness Lawler and Baroness Cash, for bringing her unique expertise in the area of behavioural science, to this debate. It is crucial that the government fully recognises the many provisions in this bill are interlinked, as we've heard from all sides of the House.

Changes in one area can have unintended ripple effects in others. As I have said, we support Statutory Sick Pay, but we must also acknowledge that these proposed changes will result in higher costs, for employers. My moments were an attempt to find, noble foxes words, to ameliorate some of those costs. To find some sensible compromises. I'm disappointed that the government has chosen to reject them. Businesses cannot plan, cannot invest and cannot hire with confidence. As I pointed out opening remarks, the facts are plain, jobs are being lost now.

Regarding an SME rebate scheme, as highlighted by my noble friend, Baroness Coffey, in her amendment 73 and spoken to by my noble friends and spoken to by my noble friends Baroness Noakes and Baroness Lawler. Also, Lord Fox and his amendment, 74. The government has stated that final decisions will follow consultation with business, through secondary legislation. The impact assessment plans for an extensive engagement with small and medium- sized businesses to test where mitigations can be made. SMEs have spoken, they have asked for a rebate scheme as a use during the pandemic.

It is therefore disappointing that the Government is not accepted the amendments to provide that support. I would suggest that the noble Lady the Minister takes up the offer to talk more on the subject, a conversation we would like to be party to. I'm pretty sure we will be returning at report. If I may just paraphrase Baroness O'Grady, the wit of man, to design a simple scheme that works. I beg leave to withdraw

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my amendment. Is it your Lordship's pleasure that the amendment be withdrawn? It is by leave withdrawn. And they're amendment and 71 B, Lord Sharpe, not moved? 72, Baroness Lister, not moved? 72, Baroness Lister, not moved. The question is other clause 11 at stand part of the bill? As many as are of that opinion, say, many as are of that opinion, say, "Content". Of the contrary, "Not content". The contents have it. After clause 11, Amendment two 73, After clause 11, Amendment two 73, Baroness Coffey? Not moved.

And 74, Baroness Coffey? Not moved. And 74, Lord Fox? Not moved. In that case we moved to 70 for a, Lord Sharpe of moved to 70 for a, Lord Sharpe of Epsom. -- 74 a.
17:08
Lord Hunt of Wirral Portrait Lord Hunt of Wirral (Conservative)
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Epsom. -- 74 a. After what has been a fascinating, wide ranging and fascinating, wide ranging and important debate on Statutory Sick Pay, I just would like to focus on the impact that these changes are going to have. In particular on absenteeism, on short notice shifts and on enhanced sick pay schemes. So I rise to speak to amendment 74 a, 74 B and 74 C. We will continue to make the point that this bill does bring with it a raft of unintended consequences.

Turning to 74 A, the importance of this amendment cannot be overstated. Absenteeism is a critical issue for many businesses, especially those in hospitality, retail and other service-based industries. Where staff shortages can lead to disruption, cancellations and even closures. With the removal of a waiting list for SSP and the expansion of eligibility, it is essential that all of us should understand fully how these changes are going to affect absenteeism patterns, across various sectors.

And one of the sectors most concerned, with the potential rise in absenteeism, that these changes will cause, is of course hospitality. Many businesses, in this sector, do rely on the part time, hourly or zero hour contracts, employing younger workers, students, or those with fewer financial or those with fewer financial responsibilities. As we know, the significant portion of the workforce in hospitality earns below the lower earnings threshold, for Statutory Sick Pay. And also, may only be employed for a limited amount of hours.

These workers are typically less dependent on their income, often are still living at home, or with fewer financial obligations. This brings us to a major concern. If these workers know that they will still receive the statutory sick pay, regardless of their financial needs, then there may be little incentive for them to attend work, they feel under the weather, or if they simply feel they would prefer a day off. The concern is that the reforms could result in workers taking sick leave when it may not strictly necessary.

As at the financial implications of their doing so would be mitigated by the statutory sick pay payment. For example, if a student worker, or part-time employee knows that they will still receive statutory sick pay, even if they don't meet the earnings threshold. They may not feel the same level of obligation to feel the same level of obligation to attend work. This is particularly true in a sector such as hospitality, where work provides either temporary or supplementary income.

As such, the absence of a financial pressure could lead to increased absenteeism, in the short term, which could, in turn, lead to operational challenges, for hospitality businesses. Especially those that already operate with small teams, a high turnover of staff, or both. As I've mentioned, we believe that it is essential for the government to thoroughly evaluate how these Statutory Sick Pay provisions would affect absenteeism. Particularly, as I've said already, sectors like hospitality, where the risks of absenteeism are most pronounced.

The impact assessment called for, in amendment 74 a will enable us to better understand the extent to which these reforms would result in higher absenteeism rate and whether there are any other unintended and undesirable consequences, such as workforce disengagement, or a lack of motivation to work in sectors where employees may not be so financially reliant on their income. So, in particular, it is vital to understand, one ) How absenteeism levels might change, especially in sectors where a younger less financially reliant workforce.

Secondly, the operational challenges, businesses would face, due to potential increases in absenteeism. And thirdly, a wider economic effect of these changes. Including potential impacts on service quality, customer satisfaction and employee morale. Turning to amendment 74 the proposal to remove the waiting period for statutory sick pay and the Lower Earnings Limit, represents a substantial shift in how sick pay obligations are structured. -- 72 B. It carries serious financial implications, particularly for low margin sectors.

Such as retail, hospitality and for small and medium sized enterprises, more broadly. So this amendment seeks a modest but necessary safeguard. It asks the government to publish within six months, a report on the impact of the Statutory Sick Pay reforms, on employers ability to offer enhanced sick pay and occupational health and well-being services. As of 2024, 28% of UK employers offer occupational health services. While 27% provide sick pay, that goes beyond statutory minimums.

While we certainly want to see those numbers improve, we must, surely, understand why provision remains relatively low. A survey conducted, last year, found that 43% of business leaders cite financial constraints as the primary barrier to offering enhanced sick pay. Others highlighted legal complexity, that was a 31% and administrative burden, 28% and staffing challenges, Rather than addressing those challenges, the government has to recognise that this bill threatens to amplify them.

The government's Statutory Sick Pay proposals risk undermining businesses that are already striving to do more for their staff, for the quarter of employers offering enhanced schemes, rising baseline costs may make those schemes unsustainable. For those not currently able to offer more than a statutory minimum is, this bill then moves the possibility of enhanced provision even further out of reach. Moreover, many employers have developed flexible, tailored schemes, adapting to the needs of their workforce and industry.

These schemes recognise that one size fits all rarely works in practice. If costs increase further without corresponding support, these personalised schemes may be scaled back or scrap entirely. -- Scrapped entirely. Let make make clear that improvements do not guarantee competition. Businesses will often choose to enhance their benefits to attract and retain talent but this only happens when they have the financial headroom to do so. When taxes are lower and regulatory burdens are predictable, businesses are incentivised to invest in occupational health and better sick pay, but the current Statutory Sick Pay proposals on top of national insurance increases and other cost pressures leave micro, small and medium-sized businesses stuck at the margin without the means or the flexibility to compete on workforce support.

All this, I must add, is being pushed forward with an absence of clarity. The government's own impact assessment admits that the behavioural impact of these measures remain uncertain yet the costs are all too real and immediate. That is why this amendment is so important. Doesn't ask for the policy to be reversed, on the that its consequences be measured. It offers a chance to step back, evaluate and understand how the reforms are impacting employer behaviour, benefit provision and ultimately workforce health.

And finally, amendment 74 C, the proposed changes to statutory sick a, particularly the removal of waiting days and the lower earnings remit -- limit are intended to support workers by providing them with access to sick pay. These changes will create significant operational challenges for businesses, especially in the context of short notice shift scheduling. The government's approach to short notice payments is that workers should be eligible for payment if they are expected to work a shift even without formal confirmation.

While we understand the need for flexibility in the scheduling of shifts, particularly in sectors such as retail, hospitality and transport, the proposed reforms could exacerbate some already considerable logistical challenges. As the legislation stands, with more workers potentially qualifying for SSP from day one of illness, businesses will likely face an increase in short- term absences. This will require employers to adjust shifts at the last minute, possibly without the certainty of knowing when SSP applies.

This leads to a direct conflict between the two approaches. First, the flexibility proposed by the government in short notice payment provisions could make it more difficult for businesses to manage absenteeism, increased absenteeism due to illness. When workers can call in sick and expect SSP from day one, businesses will inevitably be forced to deal with more absences at short notice. This situation could leave employers uncertain about when to issue SSP payments. This would increase the administrative burden.

Secondly, with SSP reforms increasing eligibility for sick pay, the potential for last-minute cancellations and redeployments grows. For businesses already facing tight margins, especially in sectors where flexibility is essential, this could create confusion and financial strain, as workers would be expected -- would expect to be paid for shifts for which they have not been fully confirmed but had reasonably been expected to work. Moreover, the interaction between these changes could create competing obligations. Whilst the predictable terms and conditions act requires clear scheduling notice, the SSP provisions could create a situation where businesses are caught between the need for flexibility and staffing, unpredictability and payments.

Employers may be forced to choose between ensuring flexibility and staffing and avoiding non- compliance with the new rules of the SSP. In conclusion, we support the principle that providing better support for sick workers, we must recognise that these changes, especially when combined, coupled with the increase in at short notice absences, these are going to play place significant burdens on businesses if not properly aligned with existing regulations, such as those introduced by the workers trade -- terms and conditions act.

It will make it harder for employers effectively to manage both sick pay and shift scheduling. I do, therefore, urged the Noble Baronesses the Minister to continue -- to consider the potential conflicts between these provisions and look for ways to align them to avoid creating undue burden on businesses, particularly small and medium-sized enterprises. I beg to move.
17:23
Baroness Fox of Buckley Portrait Baroness Fox of Buckley (Non-affiliated)
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Amendment proposed. After clause 11, insert the following new clause

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in the words as printed on the Marshalled List. I actually should have spoken in

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I actually should have spoken in the other debate, even though... But the other debate, even though... But I will carry on. I also want to I will carry on. I also want to refer to the issue of absenteeism but I feel as though I wondered into the skivers debate and I don't necessarily want to be involved in necessarily want to be involved in that. I am not worried that sick pay that. I am not worried that sick pay will create a nation of skivers or will create a nation of skivers or everybody saying they are sick.

everybody saying they are sick. There seems to be a conflict in government priorities in relation to our attitude to work and our our attitude to work and our attitude to sickness. There do seem to be some tensions between the to be some tensions between the discussion around the welfare system and PIP, for example. And the and PIP, for example. And the concerns raised about -- in the debate about larger numbers claiming disability benefits, especially for mental illness. I actually thought that the questions asked by the...

Wes Streeting, the Health Secretary, in terms of the problem of overdiagnosis, encouraging a culture in working age adults, especially young people, feel themselves to be incapacitated and dependent on the state in a demoralising way, in such a way that they are written off, it is actually a very mature way to look at that discussion. I thought that it was something we should consider. In relation to our discussion, I think we have to acknowledge as well a phenomenal that we discussed quite a lot in the Mental Health Bill of it becoming -- being unwell, particularly being mentally unwell as integral to many people's identities, and the figures that we are given in the earlier debate but I was meant to speak, which was when Baroness Cass made the point about, and other made the point about huge numbers of people who are now off from work or in terms of disability due to mental ill-health would indicate note that there is an increase in mental ill- health but there is an increase in new cultural phenomena of people feeling they are not able to cope in some capacity.

The reason why I raised this in relation to this bill as I think the government are having a mature and interesting discussion on welfare over there, but I cannot see how this is in conflict with the Statutory Sick Pay provisions and the debate we've had in relation to this bill. So I did therefore think that amendment 74A which calls for an impact in relation to absenteeism, I'm concerned in a different way from the absenteeism, which is if it is the case that Liz Kendall is the Minister or Wes Streeting incentivises or encourages people who have been on long-term sick leave to return to the workforce, may be others care home jobs that have just been created.

But will they willingly do that or will they take advantage of this new flexible sick leave from -- sick pay from day one? I'd like to know whether that would be likely to happen. How would employers be encouraged to employ them? I think Baroness Noakes made this point. How would they be encouraged to employ somebody who has been on long-term sick leave? If you say to them you can have sick pay from day one, it becomes a bigger risk for the employer to take on that particular person.

The very people that we or the government wants to get back into work. And for their own sake, they should be in work because it's not doing them any good. Just finish on this, I think we just need to be honest in this discussion that having time off sick at the moment is something that was so hard fought for for all those years to get sick pay. We do live in a different period were sickness is viewed differently. It's almost like a badge of honour in some instances.

It's also become a kind of way of coping. I will just give an example. When I was involved in further education as a teacher, it was the first time I ever came across, 25 years ago, people were starting to take stress-related sick time. And it was often when there had been a political dispute at work or there had been some big row at work or some disciplinary action that happen. Instead of it being dealt with politically, people took stress-related leave. Stress-related sickness, I mean.

Fair enough. That was fine but it was one or two people. At one point in the further education Department of humanities, one third of the staff were of with stress. It was a dysfunctional department, as you can imagine. I agreed with the Minister when she said earlier that we were hoping that a happier workplace, we can that a happier workplace, we can have less stress. I agree with that point. I genuinely think that there is something else going on. I think that sickness has become a way that people express their problems in a range of ways.

People lose the habit of work. My concern is that what is happening with this bill, particularly in relation to some of the less flexible ways that it has been dealt with and sick pay in this instance is that, actually, we incentivise those regressive ways that people are retreating from the workplace. There was a report out today, by the way, that says Gen Z believe the workplace itself makes them ill and that workaphobia needs to be taken into consideration.

It's an academic study, so the language is a bit odd. That's why people should be treated with leniency about not going into the workplace because they themselves find going into the workplace and attracting far too stressful. Is that kind of nonsense, to be frank, that I hope we won't encourage inadvertently with this bill.
17:30
Lord Vaux of Harrowden Portrait Lord Vaux of Harrowden (Crossbench)
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I'm also a bit puzzled by the groupings, like the noble Lord Lord Fox. I'd like to speak to this group rather than the last one. Everything I say to this group applies just as This group requires impact assessments were carried out on the various effects of the bill that Frankly a lot of this would not be necessary if the bill had been properly thought through from the beginning. If there wasn't so much detailed to be filled in later by regulation and in particular for proper risk assessment having carried out in the various changes proposed.

This bill, would buy the government's own admission put disproportionate impact of over £5 billion. It will have potential impacts on the employment opportunities for those with poor employment records. So it really is a deeply unsatisfactory that it should have not been properly impact assessed. The Regulatory Policy Committee rated the impact assessment is not for the purpose. I think it's worth reminding noble Lords what they actually said. "Given the number of each of the measures will be proportionate to undertake the labour market and broader analysis to understand the broader analysis to understand the overall impact on employment, wages and output and particularly the passthrough of employer cost to employees.

" The eight individual IA's and the summary IA need to provide us analysis and evidence, in relation to the rationale for intervention, identification of options, including the impact on small or micro businesses and justification for the preferred way forward. It is a damning that was not done before this bill was presented to us. Before the noble Lady the Minister pointed this out I do have to proceed that the statutory sick pay individual impact assessment, within the impact assessment is in fact the only one of 23 that is rated as good.

In itself a pretty damning statistic. However, the monitoring and evaluation plan, for the Statutory Sick Pay part is rated as weak. So, the noble Lord Hunt has already referred to the potential unintended behaviour aspects, that arise, which are not in any way covered in the impact assessment. In fact there is a complete copout, it says it can't do this, because of the behavioural impact. So sadly these proposed amendments and amendment 75, in the previous group are clearly necessary.

As are the others that we are going to be debating later on today and throughout the committee process. The five year review that the noble Lady the Minister referred to frankly doesn't cut it. Given the significance of the measures, in this bill and how quickly they will have an impact, 5 Years Is Way too long to wait to understand whether it has been damaging or not. I do not wish to test the patience of the House by repeating this speech multiple times, during the process of the committee, so I would ask the noble Lady the Minister to take my support for proper and timely reviews and impact assessments, of the impact of this bill, as we go forward.
17:34
Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch, Parliamentary Under Secretary of State (Department for Business and Trade) (Labour)
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My Lords, as a noble Lords of identified we are now continuing the debate on Statutory Sick Pay and to specifically address at the impact of these measures on businesses. I believe it is important to highlight that statutory sick pay system and the changes we brought about, as part of this bill, is designed to balance providing support for the individual, whilst minimising the cost to the employer. This group of amendments, 74 A, 74 B and 74 C, tabled by Lord Sharpe and Lord Hunt seem to require impact assessments on absenteeism, enhanced sick pay schemes, occupational health and short notice should pay working.

As I mentioned earlier and is the noble Lord, Lord Fox has already identified, the government has already taken, undertaken a Regulatory Impact Assessments Bill which considered the likely direct business impact on SSP changes. This included considering the impact on a small and medium enterprises and In the red glittery impact assessment, the government estimated that the cost of delivering these measures would be, as I said before, approximately £15 extra, per employee. A relatively modest amount, when compared to the positive impact changes it will have on employees and overall productivity.

And I have to say that I do thank the noble Lord, for these are three amendments, tabled, all of which require impact assessments. And I'm looking forward to debating those with the other 23 also requests for impact assessments that the opposition have already tabled. So I think we have a pillar four of request for impact assessments. And I do reassure the noble Lord that we are, of course, at the same time, updating our Regulatory Impact Assessments Bill and operating a post-implementation review of the measures.

So I think probably there the opposition requests are not the opposition requests are not necessary. If I start with amendment 74 A, requiring an assessment on impact and the changes to SSP and absenteeism. We do acknowledge that the overall sickness absence may increase as a result of the bill. This isn't a loophole. Nor is that the government not considering the There is a very objective of these changes are to enable the lowest paid employees to take time off, when they are sick.

Under the new system, employees will be able to take the time they need to recover from short-term illness, without struggling through work. And often risking the spread of infectious diseases, such as influenza. Similarly, employees with long-term, or fluctuating conditions should feel able to take a day of the sickness absence to manage their conditions, to prevent it from worsening. Noble Lord, Lord Hunt suggested employees might be encouraged to misuse of the system. I have to say that if employers have the right policies and practices in place, that risk of inappropriate absenteeism can and should be mitigated.

Additionally I believe that noble Lords amendment would be quite difficult to deliver in practice. There is not a standard measure of absenteeism, vs legitimate sickness absence. And in many instances, it would depend on whether you asked employer or the employee. The government does intend to build upon the red glittery impact assessment and as I have said, you do intend to conduct a post-implementation review of the measures, in the employment rights bill. If I turn to amendment 74 B, to assess the impact of the reforms, in this bill on employee ability to confirm enhanced sick pay and occupational health services, particularly low margin sectors like I appreciate the novel's concern about the potential impact on this matter.

And the government certainly agree that it would not be in anyone's interest for there to be a rollback of occupational sick pay, or occupational health provision. However the government's view is that these changes should only serve to strengthen the link between the workplace and the employee. I would question why any business would want to use these changes, as a reason to reduce the support they provide their employees to help them stay in and return to work. The noble Lady, Baroness Fox asked about the government's policy of getting people back to work and she was I think we are talking about a balance here, where people are sick, they should have the right to be of sick.

I also accept the point that she is making that being at work can in itself be a healing experience. We shouldn't lose sight of that. There is a positive, there can be a positive health impact, from being at work. And I would, once again, draw noble Lords attention to the written working review, as they settled earlier, in the debate, the Charlie Mayfield, considering recommendations on how the government can support and enable employers to promote healthy and inclusive workplaces. I support more people to stay in, or return to work, after periods of sickness, absence.

That review is expected to produce a final report, in the autumn of this year. I believe that much of the keep Britain working review will address other noble Lords concerns. I hope this reassures them that the Government is taking the matter seriously and we look forward to the results of that review. Finally, I tend to amendment 74 C, to review the effects of the SSP changes on ship management, at short notice scheduling in the workplace. As discussed in the moment 74 A, the number of sixes absences may go up as a result of these changes.

This is because it will enable employees to take time off when they are six. May I again reassured noble Lords that the government is committed to understanding the impact of these We intend to conduct a post- implementation review, of these measures, in the Employment Rights Bill, within five years of implementation. Additionally, as I set out earlier, in the earlier debate, the Department for Work and Pensions conduct regular employer and employee surveys, that will continue to do so, providing a further impact of SSP changes, and a range of employers and employees.

However, this amendment would require the government to collect a significant amount of data, from businesses on what the House will understand is a wide range of issues. We believe this would be challenging for them to provide, typically with less than six months. This is the very thing that the noble Lord is seeking to avoid, extra bureaucracy that he is talked about. For example asking employers including SMEs to accurately record and report to government, the frequency of shift cancellations and redeployments, because of sickness absence isn't practical, or reasonable.

So I think we have had a worthwhile debate, a short debate on these issues. I hope you have persuaded noble Lords and that we are on the case and it these issues and I hope, therefore, that the

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amendments can be withdrawn. The Minister said, during her

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The Minister said, during her remarks, that it would be a cost per employee of a £15 stop she said that employee of a £15 stop she said that in the earlier group as well. I ask the noble Lord the Minister if she can provide any more information on this? It seems counterintuitive, if this? It seems counterintuitive, if the average six days per employee is around eight days, which is what the most recent survey data showed. That implies that the employers, they are already bearing the cost of something like seven point five days and are only going to be paying for an extra half day, which doesn't an extra half day, which doesn't seem to be consistent with the evidence of the nature of absences that also exist.

Most are at the that also exist. Most are at the shorter end and probably going to be below the level at which they are currently being reimbursed by Statutory Sick Pay. This has been Statutory Sick Pay. This has been troubling me for some time, but I hope that the noble Baroness will be able to provide some further information. I do not expect it from the dispatch box, I would be delighted if it were to come from

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the Dispatch Box right now, if she could write to me, I would be most grateful. I suppose that the simple answer to that is it is in the regulatory to that is it is in the regulatory to that is it is in the regulatory The noble Lord did acknowledge. One of the things that we got a fair rating for. I referred the noble Lady to that, which I think will give more details.

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give more details. I have read it and there is no more detail in the impact assessment, on the £15. That is why

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assessment, on the £15. That is why am I asking the noble Baroness the Minister if she can provide further detail on how that £15 is arrived at. I'm happy to write to the noble Lady.
17:43
Lord Hunt of Wirral Portrait Lord Hunt of Wirral (Conservative)
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Lady. The other frontbenchers, that

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The other frontbenchers, that I'm very grateful to the noble I'm very grateful to the noble Baroness, the Minister. I think we have had a very important debate. I'm particularly grateful to the noble Baroness, Lady Fox of Berkeley. Because, we haven't really Berkeley. Because, we haven't really spent enough time worrying about the people who were just unable to work. Working conditions have changed so Working conditions have changed so much and stress related sick leave is a huge issue.

As is what the noble Baroness referred to as losing noble Baroness referred to as losing the habit of work. These are issues that we have to think about very that we have to think about very carefully. There is an important and complex issue of so-called present which deserves greater attention in our discussions about workplace our discussions about workplace health and productivity. -- presentism. I did have in mind some research carried out by Robinson Cooper. Their 2023 data, drawn from over 3,000 UK respondents, 60% of employees recorded working while they were unwell.

So-called present to use them, in the last three months. That is an important issue which has to be taken into account, in any impact assessment. The distinction is essential because not all forms of working while unwell are inherently harmful. Some such as pragmatic or therapeutic persons can be beneficial for both the employer and the employee. The challenge lies and the employee. The challenge lies in when it becomes a detrimental and ensuring that workplace policy including Statutory Sick Pay reform support businesses in managing that balance effectively.

I'm also grateful to the noble Lord, Lord Faulks on, in reminding us in the finding of the Regulatory Policy Committee. We just need to be aware of the severe criticism that was meted out about a bill which is making such profound changes, whilst in the gleam of uncertainty -- Lord Coe. None of us can be sure what effect these changes are going to have. I think it is been a valuable debate, and grateful to the noble Baroness the Minister.

I would just Baroness the Minister. I would just like her to ponder, as to what discussions, what conversations the government has had, with businesses who are currently providing enhanced sick pay, or occupational health And how have those this -- those businesses described the risk? Particularly in relation to their ability to sustain or expand those schemes. As we have discussed under earlier amendments, the interaction between SSP changes and short notice shift management remains alive concern.

Many businesses, especially in hospitality, care and retail, operate in high turnover and dynamic scheduling, so it would be helpful at some stage to know what feedback the government has received from employers in these sectors about the potential conflict in increased SSP eligibility and their ability to manage short notice absences. We manage short notice absences. We

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will I am sure return to this issue at Report Stage. In the meantime, I beg leave to withdraw the amendment. Is it your Lordships leisure that

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Is it your Lordships leisure that the amendment be withdrawn? It is by the amendment be withdrawn? It is by leave withdrawn. Amendment 74 B, leave withdrawn. Amendment 74 B, Lord Hunt, and 74C. The question is Lord Hunt, and 74C. The question is that the amendments stand en bloc. All of those in favour say, All of those in favour say, "Content". Those in the contrary say, "Not content". The contents have it. Amendment 75, not moved. have it.

Amendment 75, not moved. The question is that clauses 14-17 The question is that clauses 14-17 stand as part of the bill en bloc. All of those in favour say, "Content". Those in the contrary
17:48
Baroness Lister of Burtersett Portrait Baroness Lister of Burtersett (Labour)
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"Content". Those in the contrary say, "Not content". The contents have it. After close 17, amendment

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76, Baroness Lister. I rise to speak to amendment 76

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I rise to speak to amendment 76 in my name. I'm grateful to those colleagues who have added their colleagues who have added their names to the -- and to the Fatherhood Institute for their help. The only scratch the surface of a policy that is letting fathers down policy that is letting fathers down badly. It is disappointing to discover that paternity pay will not be paid from day one. Could my noble be paid from day one. Could my noble friend the Minister explain why it friend the Minister explain why it won't be? The amendment goes through a review of parental grave -- a review of parental grave -- parental leave.

The purpose now is parental leave. The purpose now is to ensure that it covers a number of key issues relating to fathers key issues relating to fathers entitled to paid leave in their baby's first year, mainly measures designed to prove fathers -- improve the take-up by fathers, taking into account examples of taxes. -- Best practice. The aims are simple. I hope we will all agree. To strengthen the rights of fathers or second parents to be active parents, which will also strengthen mothers and respect of mother's labour position.

This will in turn achieve greater gender equality. The situation is pretty woeful as far as fathers are concerned. This has practical, cultural and symbolic effects. It is in fact saying that fatherhood is of less importance to family life. Insofar as the labour market accommodates responsibilities for childcare and need only do so for mothers. If we want to surround boys with positive symbolic messages about masculinity, what better place to start than to give their fathers the time they need to build strong relationships during infancy that last a lifetime, thereby ensuring that fatherhood is valued.

I don't have the time to give details of what fathers are entitled to what fathers are entitled to compared to mothers. As well as offering one of the lease offers in the OCD, the UK has a huge gap between mothers and fathers entitlement to leave in the baby's first year. I 2022, most countries in Western Europe had 12 weeks or less. The partial extension of day when rates does not touch the sides when it comes to the current, shoddy treatment of fathers, which has resulted in low paternal take-up of both paternity and shared parental leave.

Paternity leave is dealt with by other amendments in this group, so I will focus just on parental leave. Take-up among fathers of the shared parental leave scheme shared parental leave scheme introduced 10 years ago is a pitiful 5% of eligible fathers, according to a 2023 government report. The scheme is also skewed against the lower income families with just 5% of the tiny population of SPL users coming from the bottom 50% of earners. Shared parental leave does not constitute an independent right for fathers, it depends on the entitled mother transferring part of her leave.

The government warned at the time that this was going to fail in its aim of encouraging fathers to take the leave and so it did. This is in part because of the way the scheme was structured, part because of the low rate of payment means that many fathers can't afford to take it, and in part because some fathers are excluded altogether. This matters for fathers, mothers, children and family life. As well as for the government's number one parity of economic growth.

It matters for fathers because it takes it very difficult for them to play and equal hands-on role in the upbringing of their infant children, which increasingly fathers wish to do. Matters for mothers because to quote the women's budget group unpaid care is a root cause of women's economic inequality. So long as women carry so much of the responsibility for childcare in the private sphere, the enter the public sphere with one hand tied behind their back.

To many women's career -- career is full of the cliff where they become mothers. Unequal division of childcare responsibilities as a key driver of gender inequality and the gender pay gap. It matters with children in two-parent families, not just for the relationship with their fathers but also the evidence suggest that for educational and cognitive development and for family relationships. Research indicates that paternal engagement during the first year can foster ongoing engagement until a child is aged at least 11, and that this positive effect builds over time.

Matters for families as it can affect family well-being and stability. It matters for economic growth as well. The Joseph Rowntree Foundation for progressive policy calculated that more generous provision for fathers earmarked for six weeks could deliver nearly 2.7 billion net to the wider economy as a result of strengthening mothers labour market position. The amendment requires a review to take account of international examples of best practice because we have so much to learn from the many countries who are way ahead of us on this issue, particularly the Nordic and some other countries who have for years included a reserve period of parental leave for fathers on a use it or lose it basis in their schemes.

To suggest that this model together with adequate payment, and I emphasise that, is the best way of ensuring fathers take up the leave. This would lead to our more equitable division of childcare responsibility between parents and enabling mothers to participate in the labour market on more equal terms. Mostly, it is a better and more effective model and extending parental paternity leave -- model of extending paternity leave. For the first two weeks, it signals clearly that the father can take it at a later date, ideally on his own, helping more mothers resume employment any.

As the Father Institute notes, fathers are seen as key to reducing the gender wage gap and the gap in men and women's participation in paid employment. Both of these act as an impediment to economic growth. In a book I wrote many years ago on feminist approaches as -- approaches to citizenship, I identified such schemes as a key policy lever for promoting greater gender equality and recognising the importance of care to men as well as women, and also to the wider society.

Much as I'd like to see this as one result of the review, I should stress that the amendment in no way ties the government's hands as to this or any other outcome apart from the provision of adequate take-up data. It could be seen as soft amendment to run Microsoft Corp. Amendment -- soft cop amendment. I fear it will be met with vision. I hope that my friend will be able to accept the amendment in this or some other form as a signal of intent.

If not, at the very least, I would ask you to make clear on the record the government's acceptance that the current situation disadvantages fathers unfairly and that there must be a clear explicit aim of the review to create a system that properly supports fathers and other second parents to play a full role in their infant children's lives. At second reading, she expressed respect for the points that I and the noble Baroness lady pen made about parental leave and the desire to go further -- Penn.

However, she also said that we need to go further. The current situation is totally unbalanced, as between the rights of fathers and mothers. Moreover, workers are gendered beings and Toro reform of parental leave is no way antibusiness. -- Is in no way antibusiness. -- thorough reform. It would contribute to economic growth. Thus, on both gender justice and pragmatic, economic grounds, I hope the government will accept the amendment and send a strong, symbolic message to mill workers that their role as fathers is fully recognised and valued.

I beg to move. -- male workers.
17:59
Lord Palmer of Childs Hill Portrait Lord Palmer of Childs Hill (Liberal Democrat)
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Amendment proposed. Insert is printed on the Marshalled List.

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I rise to speak to amendment 76

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I rise to speak to amendment 76 -- 86 in my name. This follows on from Baroness Lister's remarks on amendment 76. Amendment 80 would amendment 76. Amendment 80 would extend statutory paternity leave to six weeks and allow new fathers to six weeks and allow new fathers to take this leave at any point within the first year after the child's the first year after the child's birth. This is rather than being restricted to the current 56 day window. At present, eligible fathers window.

At present, eligible fathers are entitled to just two weeks of leave, paid at a rate of less than half of full-time earnings at minimum wage. The take-up remains low and affordability is a major factor. 62% of fathers say they factor. 62% of fathers say they would take more leave if statutory paternity pay was higher. Greater equality in parenting is essential to achieving greater equality in the workplace. At present, the unequal distribution of caring responsibilities is a major driver of the gender pay gap.

On average, women's earnings fall by approximately 40% following the birth of her first child and often do not recover. By contrast, men's In 2013, the Liberal Democrats led a significant step forward. It gave families option to shelter 50 weeks of leave, 37 weeks of paid. However, it was only a first step and further reform is clearly needed. Take up of both the shared parental leave and paternity leave remains far too low. Affordability is the central Affordability is the central barrier, a poll conducted recently found that 62% of fathers would take more leave if a statutory pay will increase.

The current statutory rate, as I said, less than half the full-time earning of a minimum wage is insufficient to allow families with a meaningful choice. This amendment reflects long standing Liberal Democrat proposals, calling for a more general and flexible system, in addition to extending the duration of paternity leave, with support increasing statutory paternity pay to 90% of earnings, a cap for higher earnings. Also advocating for requiring large employers to publish their parental leave and ensuring greater transparency and accountability from hell parental leave is often across the workplace.

This is a practical and necessary reform that would support early bonding between fathers and their children, reduce the financial penalty of caregiving and promote greater gender equality, both at home and in the workplace. My Lords, turning briefly to amendment one three six in my name. This purely deals with the gap in the legislation and extends statutory adoption to their self- employed contractors, taking into account the fact that many are required to work, not an employer employee relationship. I also wish to briefly comment on and show support for amendment of one three nine, which is in this group in Baroness Penn's name which would make a statutory paternity pay a day one right for new fathers and families.

Present eligibility for and paternity pay allows for six months of consistent services. This allows far too many fathers, vertically those in part-time or agency work excluded at the very moment their support is most needed. This isn't just about fairness in the workplace. It is about supporting families in those precious first days. It is about allowing both parents to share the load, bond with their child and begin family life on equal footing. The current system entrenches outdated assumptions about who provides care, making paternity pay available from day one would send a powerful signal that would value roles in early childhood and every child regardless of their payments parents history deserves a good start.

I hope they will consider this amendment thoroughly and
18:05
Baroness Penn Portrait Baroness Penn (Conservative)
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consider with this bill. Amid those consider with this bill. Amid those consider with this bill. Amid those I will speak to members 127, 128 and 139 in my name. But before doing so I would like to add my support to all the amendments in this group, particularly Baroness Lister particularly Baroness Lister particularly Baroness Lister Zimmermann 76, to which I've also added my name. As we have heard already our current system parental already our current system parental leave is in a desperate need of reform.

And for some of that reform I accept a review is necessary. How can we improve the shared parental can we improve the shared parental leave, something that I was proud to have worked on in the coalition have worked on in the coalition government. But I think I and the noble Lord had accept hasn't delivered the change that we want to see. And how to extend parental leave to self-employed people, mums, dads and adoptive parents at a dads and adoptive parents at a proper rate of pay.

As the noble Lady Baroness Lister will no, I do think she is being too generous to the government with her mind, when this government first took office, the employment rights Minister committed to the review of parental leave being completed, within their first year. Now it is meant to be launched within their first year. In a report in the Commons and the Minister only committed to a launch This This bill. This bill. I This bill. I think This bill. I think even This bill.

I think even on This bill. I think even on the This bill. I think even on the most optimistic timetable will be after 4 July. So, as well as giving important clarity, to the point that the noble Lady, Baroness Lister has called for, that the review will cover key issues including measures designed to improve fathers a take- up of parental leave, such as a dedicated period of leave and adequate payment and the inclusion of self-employed fathers, could the noble Lord the Minister give us a reassurance on timelines, will the review be launched within this first year in government and how long will the review be.

Six months with seem like a reasonable period of time to report back on its outcomes, but I look forward to hearing from the Minister, what the government's plan Perhaps, while necessary in some areas, it is important not to confuse a review, with action. The Minister kindly met with me, last week to discuss my amendments and it was clear, and that meeting, that the review would not be a consultation on specific proposals, that would have to come later. So added to any timelines for action, consultation on the outcomes of the review and then subject to its In reality we are talking about the timeline extending over several years.

So am afraid that is not good enough on areas where there is clear evidence to support action, now. And that is on improving paternity leave. It has been said that we are On how bad are paternity leave is in the UK and how unequal our provision is, between mums, dads and a second parents. And yet if you increased paternity leave to 6 weeks pay at 90%, of the salary, capture average earnings, as my amendment 127 does, the evidence of the benefits, is overwhelming. As Baroness Lister has said, it will improve things for dads, this week is mental health awareness week and according to research by downshift in November, more than half a dads experience multiple symptoms of depression in the year that the baby is yawn.

82% of that better paternity leave is the number one thing that the government can do to protect dads mental health. We have heard how it will support a new mums and kids too. It will support economic growth and that is supposed to be this government's number one priority. government's number one priority. This week it is important and I'm acutely aware that in our discussions on this bill, that we have heard of the concerns from employers that they have expressed
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