INTERPRETATION OF PART III (Hansard, 9 April 1987)

§ Mr. Millan
I beg to move amendment No. 14, in page 57, line 23, at end insert 'or'.

§ Mr. Deputy Speaker (Mr. Harold Walker)
With this it will be convenient to discuss the following amendments: No. 15, in page 57, line 29. leave out from 'employment' to end of line 30.
No. 16, in page 58, line 4, at end insert— '(h) statutory sick pay.'.

§ Mr. Millan
The purpose of these amendments is to take statutory sick pay out of the list of items which are included in earnings for arrestment purposes and put it into the list of items which are not to be treated as earnings in the arrestment arrangements. Again I am obliged to the Scottish Association of Citizens Advice Bureaux for pointing this out, because I missed it on reading the Bill initially.
I find it odd that statutory sick pay, which is like a social security benefit, should be included in the determination of earnings for arrestment purposes. Under the clause, other pensions, allowances or benefits payable under social security legislation are excluded. In those circumstances I do not understand why statutory sick pay should be included. In fairness, statutory sick pay should be excluded. I hope the Solicitor-General will agree to statutory sick pay being transferred to the category of items which are not to be included as earnings for arrestment purposes.

§ The Solicitor-General for Scotland
Hon. Members will be aware that the Bill makes a deliberate and careful distinction between payments—pensions, allowances and benefits — made under social security legislation and statutory sick pay. Payments under social security legislation are expressly provided to be not equivalent to earnings. Such payments are therefore quite rightly not taken into account in the Bill's provisions about which deductions are to be made under an earnings arrestment from weekly or monthly earnings.
On the other hand, statutory sick pay is payable in replacement of earnings when an employee is sick. It is 498 therefore entirely reasonable and logical that what an employee receives from his employer, whether as earned wages or statutory sick pay, should be treated as earnings for the purposes of the Bill's provisions. That was the intention of the Scottish Law Commission, which it expressed in paragraph 6.36 of its report. The provisions simply bring Scotland into line with England and Wales.
In 1985 the relevant English legislation about attachment of earnings was amended by the Social Security Act 1985. This House and the other House have accepted the principle that statutory sick pay is to be equated with earnings. For that reason it is difficult to see why the right hon. Member for Glasgow, Govan (Mr. Millan) foresees any distinction being brought about between Scotland and the rest of the country.
The system that we have is designed to safeguard the interests of the debtor and creditor by ensuring that regular payments are made to the creditor to reduce the debt. The regular instalments are of an amount which the debtor can be reasonably expected to contribute. This scheme would be disrupted if, in a week in which the employee was sick, no deductions from his earnings were to be made. It would produce quite unnecessary complications for the employer — who must operate the arrestments — and the employee. The disruption in the smooth running of earnings arrestment is not necessary or justifiable on the ground of principle. The right hon. Member for Govan probably is aware that the Scottish Association of Citizens Advice Bureaux has made that point.
What should be made clear is that if deductions are to be made from statutory sick pay they should be on the basis of the net earnings as set out in the schedule to the Bill. The amount of deduction would not continue at the rate appropriate to the wages received prior the period of sickness.
As the right hon. Gentleman will appreciate, it is not just statutory sick pay arrangements that are made; certain additional sick pay arrangements are also made. If what the right hon. Member suggested were to be incorporated in the Bill it would leave the employer in the extremely complicated position of trying to work out exactly what was to be included in earnings, from which a deduction could be made, and what was to be excluded.
On that basis I hope that the right hon. Gentleman will withdraw his amendment.

§ Mr. Kirkwood
I rise because I was not quick enough to catch the eye of Solicitor-General for Scotland. Am I right in assuming that the new statutory maternity pay would come under the social security legislation, to which he adverted, and therefore would be exempt? That is a detailed point, so if he cannot answer it now I should like some assurance at a later date.

§ The Solicitor-General for Scotland
I cannot be certain on this point. If the hon. Gentleman wants me to pursue it, I shall write to him.

§ Mr. Millan
I am not convinced by the argument of the Solicitor-General for Scotland. I did not mention any distinction between Scotland and England; I was not aware that there was a difference. The argument that Scotland must be brought into line with England for consistency reasons is an unattractive one. It persuades me that my amendment is a good one.
499 Statutory sick pay is what would otherwise be a national insurance benefit. The Solicitor-General for Scotland shakes his head, but that is what it is. It puts a certain obligation on the employer in circumstances where previously national insurance benefits were paid. It should be included, analagously, with national insurance benefits in the items which are excluded from the definition of earnings for the purposes of this clause. I am not persuaded by the argument of the Solicitor-General for Scotland and I feel disposed to take this to a Division.

§ Mr. Deputy Speaker (Mr. Harold Walker)
I must apologise to the House because I omitted to deal with amendment No. 13. Will the Solicitor-General for Scotland please move it formally?