HC Deb 03 March 1981 vol 1000 cc120-1
11. Mr. Skinner

asked the Secretary of State for Social Services what further representations he has received regarding the need to withdraw the Government's proposals to pass on the obligation to pay sick pay from the Government to employers.

Mr. Patrick Jenkin

I refer the hon. Member to my hon. Friend's reply to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on 16 February.

Mr. Skinner

Why do the Government not get rid of this proposal altogether and consider reintroducing the matter again in the autumn? Is it not a fact that the Tory Government are filled with detestation of workers who lose money, unlike favoured groups such as Members of Parliament, when they fall sick? Is the right hon. Gentleman aware that the Tory Government are prepared to hammer the small businesses that are still left, so much so that they will make them fill out forms and pay out the benefit which the Government are intending to cut? Why do the Government not get rid of the proposals altogether?

Mr. Jenkin

I am surprised by the hon. Members newfound sympathy for small businesses. He will remember that both sides of the House have been committed for some years to the principle of bringing short-term benefits within taxation. The Government's proposals would achieve that purpose. They would also eliminate a substantial measure of overlap in administration and save staff in my Department. The great majority of employers have said that they support the objectives of the scheme. We are again considering a method of compensating employers for the new statutory duty that they will undertake.

Mr. Chapman

Will my right hon. Friend confirm that had his proposal been implemented it would have been possible to save about £300 million to £400 million of public expenditure and reduce Civil Service staff by about 5,000? If that is so, will he consider that again with a view to meeting the real problems that small businesses feel that they face, to see whether an acceptable formula can be found?

Mr. Jenkin

My impression is that it is not so much the small businesses that are affected, because we offered them a generous package of compensation and we are investigating an improved method whereby they might achieve that through a deduction from their PAYE payments. My hon. Friend is correct. These are valuable objectives and we want to achieve them. We shall introduce legislation early in the next Session.

Mr. Cryer

Does the Secretary of State accept that many small organisations and businesses in my constituency have written to me to urge deep and sustained opposition to his proposals? Does he recognise that by shifting the responsbility to employers he is putting more burdens on the backs of small businesses and, because of the uneveness of the administration, more burdens on the sick?

Mr. Jenkin

The complaints about the proposals on which we have consulted widely have been almost entirely directed at the method of paying compensation to employers for their new duties. We are considering how to match the compensation more closely to the sickness experience that firms are likely to face. I believe that that will go a long way to remove the objections by large and small employers to the proposals, which the majority support in principle.