HC Deb 07 July 1981 vol 8 cc254-5
10. Mr. James A. Dunn

asked the Secretary of State for Social Services what is the anticipated increase or decrease in the net amount paid to recipients of sickness benefit which would result from the implementation of the proposals contained in the consultative document "Compensating Employers for Statutory Sick Pay".

Mr. Rossi

One of the purposes of the statutory sick pay scheme is to bring the majority of payments for short-term sickness into tax. The rate of statutory sick pay—£37 per week—has therefore been set so that recipients of sickness benefit as a whole will receive the same net income as they would if national insurance sickness benefits were brought into tax.

Mr. Dunn

Is the Minister aware of the apprehension that is felt among recipients and applicants for that benefit, not least those who are family men, who may find that there is a time lag in the payment of the full benefit that is due to them? What guarantee can he give that they will be no worse off under the changed system than they are under the existing system?

Mr. Rossi

The payment will be made direct to those people by their employers as wages. It will be a net amount, as if the sickness benefit had been made subject to tax. Therefore, there should be no need for apprehension.

Mr. Buchan

That makes nonsense of the Minister's previous statement with regard to flat-rate payment. In fact, there will be two flat-rate payments. May I come back to his global figures, when he said that £400 million of public expenditure would be saved? Is it not the case that that figure fails to take account of the amount of compensation to be paid to employers of over £600 million, and when we do our sums are we not left with the minute figure of about £25 million that would be saved in the PSBR? I repeat: is it not nonsense to unscramble one of the basic planks of the Welfare State to save that minute amount of money?

Mr. Rossi

I repeat what I have already tried to say to the hon. Gentleman. We do not agree over our sums. I must challenge his figures. We shall debate the matter in due course. At the moment, I stand by the figures that I have already given to the House. The savings anticipated are of the amount that I have mentioned.