Statutory Sick Pay Bill

HL Deb 01 February 1994 vol 551 cc1190-217

3 p.m.

Report received.

Clause 1 [Restriction of employers' right of recovery]:

Lord Jenkin of Roding

moved Amendment No. 1: Page 1, line 5, at beginning insert ("Subject to subsections (3) and (4) below,"). The noble Lord said: My Lords, I believe that it would be for the convenience of the House if, in moving this amendment, I speak also to Amendments Nos. 2 and 5 which are part of the same group of amendments designed to achieve our purpose.

I make no excuse for returning to the issue which we discussed both on Second Reading and in Committee; namely, how best to protect small employers from the financial consequences of abnormal sickness among their employees. The House will recollect that government proposals in the Bill involve two tests. First, they define "small employers" as those with annual national insurance contributions of under £20,000. That is an improvement on the present position where the figure is £16,000. In Committee I described the firms which qualify as being within the charmed circle. If you come within the charmed circle, you can move on to the next stage. If you do not, that is the end of the matter.

The second stage is to reimburse statutory sick pay paid to any employee in respect of over four weeks' sickness. I do not wish to go into great detail. I wish merely to recap briefly and describe the three main disadvantages of that scheme. First, it creates an arbitrary barrier or threshold, contrary—I remind the House—to the very first recommendation of the report on deregulation of the committee chaired by my noble friend Lord Sainsbury of Preston Candover. Secondly, it fails to provide relief in cases where many small employers might think that they deserved it. If no employee is off for more than four weeks, however many are sick at the same time—I gave the example of a number of employees being injured in a minibus accident—no reimbursement is made. Thirdly, it manages to provide relief to very wealthy firms, perhaps with a very few highly paid professional staff, when common sense would suggest that that is quite unnecessary. I shall leave the matter there because I spelt it out in Committee.

The scheme proposed in the Bill aims at the wrong target. It is aimed at small firms, when it should be aimed at an exceptional level of sickness in the firm as a whole rather than long periods of individual sickness.

The alternative system which we discussed in Committee and which has been put forward by the Forum of Private Business is administratively much simpler and hits more accurately the target of exceptional sickness. It triggers reimbursement when in any month the statutory sick pay paid by an employer exceeds a given percentage of his monthly national insurance contributions. He must know both those figures and he merely needs to compare them. The proposal is that the percentage should be fixed by order. As an example, we took the figure of 5 per cent. On that basis, any statutory sick pay paid in a month in excess of 5 per cent. of a firm's monthly national insurance bill is then reimbursed.

That is a trigger. There is no artificial threshold as there is with the £20,000 limit. There is no charmed circle. It catches all exceptional sickness and reduces sharply unnecessary payments to wealthy firms. Simply because of the law of averages, it is extremely unlikely that very large numbers of people in large firms will be off at the same time. It is by no means improbable that half the employees of a small firm may be off sick at the same time. Therefore, in practice, it gives substantial help to small firms.

The percentage figure would be fixed by the Government at a level which ensures that the overall cost is no greater than under the present scheme. I imagine that that would be a requirement of the Treasury, if my noble friend were in discussion with it.

In Committee my noble friend offered two substantial objections to the amendment. He said that the scheme would be open to abuse by unscrupulous employers who might be tempted to shift their statutory sick pay payments from one month to the next in order that, in aggregate, they might reach the 5 per cent. figure, or whatever it is, when in two individual months they would not reach that level.

Secondly—and many of us were impressed by the force of my noble friend's argument on this point—there is not enough time between now and April for either proper consultation or for the necessary steps to be taken to implement the scheme. To some extent those two objections are linked because I have no doubt that, with more time to consult and plan, the risk of abuse could be eliminated substantially.

Therefore, the amendment which I have tabled and to which other noble Lords have added their names aims to meet my noble friend's objections by proposing that the revised improved scheme should come into force not on 6th April of this year but on 6th April 1995. In other words, that gives the Government not two months but 14 months in which to prepare the scheme. It would allow time for wide consultation with employers. It gives firms time to change their payroll systems, including computerised systems. It provides the department with sufficient time to set up its own control and monitoring machinery so as to check the possibility of abuse.

However, the amendment also offers the Government a let-out because it is conceivable, although extremely unlikely, that further consultation and examination might reveal as yet undiscovered snags in the scheme which would make it, in the event, impracticable. Therefore, the Government must be able to come to Parliament and say—I put it in the oratio recta—"Sorry, it cannot be done. We have looked at the scheme very thoroughly and most people would prefer to stick to the relief that was originally proposed". I do not believe that that is likely but it is not impossible.

Therefore, the amendment proposes that if the Government can bring forward a report before 30th November of this year, the anniversary of the 1993 Autumn Budget, recommending that the revised scheme is not proceeded with and then, before 31st January, Parliament approves the report, the new scheme would be stillborn. It would not come into effect and the Government's existing scheme would remain in force. If the Government reach the conclusion that the new scheme is wholly practicable and is indeed better—my noble friend made some kind remarks about it at earlier stages—then it will come into operation automatically on 6th April 1995. I believe that that meets the Government's main substantial objections.

The forum's proposal has attracted wide support. We have been told by my noble friend Lord Reay that it is backed by the CBI. It has been backed by the Institute of Directors, although rather more sotto voce, and it is backed by the British Payroll Managers Association, which is a professional body representing the people who will have to operate the system. I am told—and I say that because I have no personal experience—that of the employers' representatives on the department's statutory sick pay panel, none is positively opposed to the scheme. Moreover, as the names to the amendment indicate, it is supported by noble Lords from all parties. Therefore, I hope that on this occasion I can persuade my noble friend to smile on the amendment. It may well require redrafting, despite the best efforts of myself arid the extremely helpful Clerks in the Public Bill Office. However, there will be time for that before Third Reading. Those concerned will have between now and the end of November for wide consultations and all the necessary preparation. I believe that that removes the main objection which my noble friend advanced in Committee. I hope that he will now feel disposed to accept the amendment or, at least, to accept the spirit behind it. I beg to move.

The Parliamentary Under-Secretary of State, Department of Social Security (Viscount Astor)

M y Lords, I believe that it will assist your Lordships if I reply to my noble friend's amendment at this stage. Of course, that does not preclude any noble Lords from speaking thereafter. My noble friend has, again, made a strong case for his amendment. As I explained when we discussed the matter in Committee, I recognise the advantages in principle of my noble friend's proposal for those employers who have an exceptional proportion of their workforce off sick at the same time.

My objections to the amendment were primarily practical and concerned the need to guard against abuse, the lack of statistical data to enable us to set the compensation threshold at an acceptable level and the lack of time to consult industry more widely on the proposal. I am, therefore, most grateful to my noble friend for his understanding and appreciation that those practical considerations and concerns could not adequately be dealt with in the remaining time before the Bill is implemented. My noble friend has found an ingenious way forward. He has very helpfully provided an amended version of his proposal which will allow the Government time to collect data on employers' monthly statutory sick pay and national insurance contributions payments. That will enable us to calculate the level at which to set the reimbursement threshold so as to cost no more than the planned costs under the existing small employers' relief scheme.

Deferment of the proposed change until April 1995 will also enable us to consult employers' and employees' organisations on the basis of a clear and detailed account of the change spelling out its pluses and minuses. Employers' and their representative organisations will be able to compare the benefits of the proposed scheme with the existing small employers' relief scheme. They will be able to judge whether the loss to those employers who would not benefit under the new scheme is outweighed by the gains of those who would.

If, after consultation, industry wanted the proposed new scheme, and the Government were satisfied that it met our concerns, my noble friend's proposal would give us sufficient time to implement it in April 1995. On that basis, I am happy to accept my noble friend's proposal. I would ask him, however, to withdraw the amendment in its present form, so that the Government can table an equivalent amendment on Third Reading which covers all the consequences of introducing a new scheme. For example, the amendment should provide for the repeal of the present small employers' relief scheme in the event of the new scheme's adoption.

However, I must tell my noble friend that I am concerned that subsection (5) of his amendment would put an unnecessary burden on Parliament to approve any report. That goes slightly too far. We believe that a report should be laid before Parliament without requiring formal approval. I hope that my noble friend understands my concerns and I trust that we shall be able to settle the matter between us before Third Reading. In the light of this undertaking, I hope that my noble friend will feel able to withdraw his amendment today. As I said, I shall be happy to bring forward an equivalent amendment on Third Reading.

3.15 p.m.

Earl Russell

My Lords, I should like to thank the noble Viscount most warmly for that reply. On this occasion the Committee stage operated as, in classic theory, it should; namely, as a negotiating process in which points are given and taken. I am extremely glad that the Government have accepted the principle of an exceptional level of sickness. Having investigated and consulted further, I very much hope that they will bring the scheme into effect in 1995.

I should especially like to thank the noble Viscount very warmly for the personal part that he has played in bringing us to the present point. However, I must stress that it is also the responsibility of people on this side of the House to look gift horses in the mouth. I hope that one tiny word of reservation may be forgiven. The amendment had only one tooth which was the power of Parliament to approve the report. I am not altogether surprised that the Executive did not find that persuasive. It is part of an argument which has been going on for centuries and which will go on for many more. I was a little disappointed to hear the job of approving a report being described as a "burden" on Parliament. However, I shall not pursue the point. We have achieved nine-tenths of what we asked for and that is much better than the proverbial half loaf. We are extremely grateful.

Lord Carter

My Lords, as my name is also attached to the amendment I should also like to say how extremely pleased I am that the Government have at least accepted the principle behind it. As we said in Committee, the amendment was ingeniously drafted. It has now been even more ingeniously drafted to meet the Government's objections.

I have two short points to make. One concerns the time for consultation. We rely on the Government actually listening to the consultations and allowing themselves to be persuaded if the arguments are strong enough. We have had past experience where that has not always been the case and where the Government have appeared to listen and have then ignored what was said.

Secondly, there are the complications about which we heard in Committee. As it happens, I am involved with a business which runs a payroll bureau. I spent some time with the firm between the Committee and Report stages. The firm undertakes 80 payrolls—some weekly, some fortnightly and some monthly. It covers companies which range from one to 25 employees, with an average of about eight. The firm largely works for the archetypal small employer. As I said, I spent some time with the firm and those concerned told me that they could see that the proposed scheme would certainly be no more complicated than the existing one. The changes to the computer and the software that would be required would- be comparatively straightforward and would be needed just to isolate the employers' national insurance contributions and the amount of sick pay. There would be plenty of time to do so in the allotted time.

The interesting point made by the firm was that the advantage of the scheme is that it relates to the immediate situation reflected in the level of existing employers' insurance contributions and statutory sick pay as it occurs through the year. Of course, the existing scheme relies on the contributions in the previous year. If there is a change in the circumstances of the firm since the previous year, then that is not always reflected in the reimbursement of SSP. In fact, the proposal would bring the scheme into action in line with the existing situation in such firms. In the case of the firm to which I referred, those concerned were quite pleased with the scheme. They thought it was ingenious and that it would work.

I should like to repeat a point made by the noble Earl, Lord Russell. I refer to the matter of not seeking the approval of Parliament. If the Government are persuaded—and the House is already persuaded as, I am sure, the other place will be—of the strength of the argument after consultation, I fail to see why they should be almost scared to ask for the approval of Parliament. That would be the proper way to proceed. I hope that they are not removing subsection (5) from their amendment because they have it in the back of their minds that they can ignore the outcome of the consultations if they wish.

Lord Reay

My Lords, as my name is the fourth name attached to the amendment, perhaps I may also join those who thanked my noble friend for having listened to the voice of the House and of industry and for having accepted the amendment. I was pleased that my noble friend emphasised the consultations that he will be having with industry for working out the modalities and the regulations to be introduced. It is most important that they should not be so complex and that, in the Government's desire to prevent fraud, they do not bring in regulations which are so burdensome, onerous and complicated that firms are reluctant to make use of them. That, to some extent, is one of the faults with the present scheme.

The scheme set forth in the amendment has the merit of simplicity. I hope that that will not be obscured by regulation. As I said, it is most important to ensure that the regulations are not such that that becomes obscured. In the meantime, I should like to thank my noble friend very much for having accepted the amendment.

Lord Boyd-Carpenter

My Lords, there are three directions in which congratulations should now be extended. First, they should be extended. to my noble friend Lord Jenkin of Roding who worked extremely hard during the earlier stages of the Bill. He evolved the extremely ingenious development which is now before the House and very patiently negotiated it with the Government. I am sure he is entitled to the warm congratulations of all noble Lords.

Secondly, I congratulate my noble friend the Minister on his flexibility. 'Those of us who have been in government know that he must have had quite a struggle inside the department, and indeed with similar departments of state, and it is a tribute to his determination and strength of personality that he has achieved this agreement. He is warmly to be congratulated. Thirdly, I humbly congratulate your Lordships' House as this has been an extremely good example of the work this House can do and does do as a revising Chamber on highly complicated, difficult and important matters.

Lord Dean of Harptree

My Lords, my noble friend has produced an ingenious scheme and now that my noble friend the Minister has accepted it in principle there is time to go into the pros and cons of the arrangements to see whether this would be a preferable scheme to the one in the Bill. However, I suggest that it is sometimes better to have a bird in the hand rather than two in the bush. As things stand at the moment, I prefer the present proposals in the Bill which come into operation in April 1994. But I should prefer them even more if my noble friend were prepared to reconsider the possibility of reimbursement after three weeks rather than four. I raised that point in the Second Reading debate and the noble Earl, Lord Russell, also referred to it in Committee. It seems to me that this could be a simple and practical way of overcoming some of the more difficult situations in exceptional sickness and injury cases which have been mentioned on a number of occasions during our proceedings.

My noble friend the Minister said that it was important in considering this matter to maintain the incentive for employers to take sickness absence seriously. That, of course, is a weighty argument, but, on the other hand, as your Lordships know, small firms tend to have a better sickness absence record than large firms. It is understandable that that should be the case. Often in small firms the boss works alongside his employees. There is a spirit of team work and people know each other well. In those circumstances it is understandable that employees would think twice before going sick and putting additional burdens on their colleagues. I hope that my noble friend will be able at least to say that he will give further consideration to that point in the light of the debates that we have had in your Lordships' House.

Viscount Astor

My Lords, with the leave of the House, I wish to answer three points. First, I am grateful to all noble Lords who have spoken who appreciate that the Government have considered this amendment and have tried to address the concerns of my noble friend. Indeed, my noble friend has restructured his amendment so that it addresses many of our concerns. I can, of course, give an assurance to the noble Lord, Lord Carter, that there will be full and proper consultation on this matter. If the noble Lord does not believe me, he should attend the meetings in my department of the employers' panel. He would then discover that we have hours of frank discussion on SSP and other subjects.

It is important that a report is made available for Parliament, and that Parliament should be able to debate that report if it so wishes. I shall discuss that matter with my noble friend. I made the point that his amendment, in seeking the approval of Parliament, placed a commitment on Parliament.

My noble friend Lord Dean of Harptree has asked about small employers' relief. We have already raised the threshold of national insurance contributions for small employers from £16,000 to £20,000, We have reduced the period from six weeks to four so that small employers will be able to receive 100 per cent. reimbursement. During this period of consultation we shall consider all the aspects of this matter. I am sure that during that period we shall have to examine how well our scheme will work while we consider the scheme proposed by my noble friend Lord Jenkin. We shall have to await the result of the consultation process.

Lord Jenkin of Roding

My Lords, I must add my words of gratitude to my noble friend. He has listened most patiently and has given much of his time, and that of his officials, to hear the arguments and to discuss our proposals. That is an excellent way in which our system can work. I am grateful to him for that. I am also grateful to all those who supported the amendment and to my noble friend Lord Boyd-Carpenter for his kind words.

One group which has not been thanked and which should be thanked is that remarkable organisation, the Forum Of Private Business. This scheme was the forum's scheme and it sold it to me. I have sold it to the Government and the forum is entitled to take every credit for that.

This matter constitutes a particular pleasure for me as I initiated the initial policy change that led to the introduction of statutory sick pay when I was Secretary of State at what was then the DHSS. We seem to have come full circle and we are now on the way to getting a good system of relief for small firms. I express again my gratitude to all those who have taken part in the debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Baroness Hollis of Heigham

moved Amendment No. 3: After Clause 1, insert the following new clause: ("Annual report by Secretary of State. —The Secretary of State shall annually publish and lay before Parliament a report on the effects of this Act upon the employment of people with disabilities and upon the level of dismissals connected with sickness or with statutory sick pay."). The noble Baroness said: My Lords, I hope very much that we can draw on a similar spirit of accord and concord, this time not on behalf of small businesses but on behalf of the disabled. This amendment, if approved by your Lordships, would ask the Secretary of State to bring an annual report to Parliament on the effect of the Bill upon some of the most vulnerable people in the labour market; namely, those in work with a poor health record, and those unemployed people who have a poor health record but who none the less seek to -re-enter work.

We fear—though we hope we are wrong—that the Bill perversely may encourage employers to sack the sick and be even more reluctant to employ the disabled in future. As regards sacking the sick, I should have thought that it was obvious that anyone with a poor health record, who perhaps suffers from asthma or a chronic heart or back condition and who often needs time off work, must, in the eyes of the employer be a less effective and efficient worker. Such people taking time off when they are ill generate problems. Other employees have to cover for them, as the noble Lord, Lord Lucas, said in Committee. Temporary staff have to be employed and extra work is involved in supervision. But at least when 80 per cent. of statutory sick pay was refunded by the Government there was some financial protection to the employer. Now, with even that financial protection stripped away—larger employers will now pay 100 per cent. of statutory sick pay—and with employers facing not only the work disruption presented by employees with poor health but also a financial penalty for keeping them on the books, is there any reason why they should do so? They are not, after all, charities.

The Minister may say that there is no evidence that firms will sack the sick when they have to pick up the bill for 100 per cent. of statutory sick pay. We do not have hard evidence on this matter but we have some anecdotes and assertions. The National Audit Office stated in its report last year: Some employers and organisations representing them told the National Audit Office that they believed that the 1991 changes to the Statutory Sick Pay Scheme had increased employers' costs". That concern has also been reported quite frequently by citizens advice bureaux. A CAB in South Wales reported the case of a client who had been off work sick for two weeks. Her employer had failed to pay statutory sick pay as she said that she could not afford it. Another CAB in the West Midlands reports the case of a client who was off sick for two weeks whose employer told him he would be dismissed if he took time off work. The CAB comments: he has no choice, he either works and exacerbates his injury or loses his job". A CAB in Avon reports the case of a client who was on sick leave, who was paid less than the full amount and who was told by her supervisor after six weeks off sick that she was to be made "redundant" and that someone was already doing her job. Another CAB in Devon reports that a client was dismissed after being off work for six months while awaiting a major operation. He was dismissed even though the doctors were confident he could return to work after the operation.

CABs around the country are reporting an increasing number of inquiries concerning sick leave, suspension and dismissal from work in connection with illness. I could go on. The CAB has many more such anecdotal stories. They are anecdotal, but they are supported by last Sunday's "Money Programme", which interviewed many employers some of whom said that due to the changes in statutory sick pay they would now be more reluctant to retain in work someone who suffered chronic ill health.

In another place the Secretary of State, speaking of this Bill, made clear that its purpose was to encourage business to police sickness records among the workforce because of the relatively high level of sickness in Britain. I am sure that business will now police those records. Too often the policing will take the form of relieving staff of their services. What are employers expected to do? Are they to introduce gyms or send their staff to health farms? No. Such people will join the ranks of those on invalidity benefit or unemployment benefit, at infinitely greater public expense.

All the anecdotal evidence so far suggests that employers will be increasingly reluctant to retain staff who are chronically sick or disabled now that employers in larger firms are to foot 100 per cent. of any statutory sick pay. Once out of the labour market the disabled or chronically sick find it extremely difficult to re-enter. Many go on to invalidity benefit, unemployment benefit and then income support. If their condition improves and they come off invalidity benefit and wish to re-enter work—as they do —what are their chances? They are slender. Only one in eight of those coming off invalidity benefit who seek work find it-12 per cent. Seven in eight do not find work. They have to go on to unemployment benefit and income support because employers will not take them on.

Of the one in eight who are fortunate enough to find work, two-thirds do so with their previous employer. In other words, if the previous employer will not take that person on, very few others will. It is not always easy for those people. Their previous employer may have gone out of business. Given that on average disabled people have lower educational qualifications—only 17 per cent. stay on at school after 16—they are not especially skilled or attractive in economic terms. They are also often handicapped by the attitudes and perceptions of employers. After all, at present 75 per cent. of employers do nothing to help workers who become sick or disabled to remain in work. They do not now adjust their hours and the conditions of work or provide the aids, adaptions and appliances which such staff may need in order to stay in work, even though in approximately a third of cases of people who become chronically sick or disabled the condition was created or exacerbated by work. The chronically sick find that they cannot re-enter the labour market.

Of those who do manage to return to work—and, as I said, only 12 per cent. of those able to work find employment—four-fifths return to the same hours and the same conditions that applied when they left work. In only one case in five does the employer adapt the work situation. That is the position now. In future if employers take on a disabled person after six months 50 per cent. of the cost of any physical adaptation to the work place will have to be paid by the employer and 100 per cent. of statutory sick pay.

Imagine, my Lords, that you are an employer. Indeed, many noble Lords are, or have been, employers. You are faced with a man of 50 with a poor health record who is likely to make claims on statutory sick pay while another 20 younger, fit men are hungry for the job and are less likely to make claims on statutory sick pay. Who are you going to employ? You are not a charity. Yet if, as the former boss, you do not employ that man, almost no one else will.

According to the Spastics Society, the disabled already find that they are six times less likely to be called for interview than an able-bodied person with the same qualifications. The disabled have three times the unemployment level of the able bodied. Now, in addition, they are to be given a negative dowry in that employers are to pick up the whole of their statutory sick pay. Will you, as an employer, take them in preference to somebody who is less likely to make a claim? I cannot believe that you would.

We moved an amendment in Committee which suggested that the negative dowry of statutory sick pay should be reimbursed by government for a limited period, thus removing the negative dowry that someone who is disabled might carry into work. However, there was not enough support in the Committee for that view. I accept that. I recognise also the point that was well made by the noble Viscount, Lord Astor, that your Lordships needed more evidence that there was a problem before such an amendment might be acceptable. I respect that view. That is why the amendment appears in its present form.

The purpose of the amendment is to determine whether the evidence exists, either way, to tell us whether the statutory sick pay proposals in the Bill are an invitation to employers to sack the sick and a disincentive to employers to re-employ the disabled. We cannot know if we refuse to collect the information. It is the mildest amendment possible. It asks that the Secretary of State bring a report to Parliament to tell us whether there is a problem. I believe that there is, and that there will be. The disability groups believe that there is a problem and that there will be. But how do we know?

I hope that I am wrong. In Committee the Minister told me that I was wrong. But as he does not have the evidence either, how can he know? I hope that he is right. The only way to find out is to monitor the situation because what we do not monitor we cannot know. We owe it to the sick and disabled to know. The very act of monitoring may persuade less scrupulous employers to behave more honourably towards those in their employ.

Hence the amendment. Technically, it is quite simple. At local level much of the information already exists. Whenever a person applies for unemployment benefit he or she has to give the reasons for leaving the previous job. That information needs to 'be collated and collected in an annual report issued by the Secretary of State. The Secretary of State is quoted at col. 1113 of Commons Hansard for 15th December 1993 as saying: There has been no evidence of sick employees being sacked or companies being more reluctant to employ people who have been sick". RADAR, the group working on behalf of the sick and disabled, says exactly the opposite. It states: There is absolutely no evidence that employers will be prepared to pay extra money to retain disabled staff. On the contrary, there is extensive evidence that workers tend to lose their jobs when they are disabled". Is RADAR right? Is the Secretary of State right? How do we know? How can we tell? It is clear that the Secretary of State cannot have any evidence if he does not collect it. If he is confident of his view, then the evidence, as reflected in the amendment, will support him. If, unfortunately, the Secretary of State is wrong, then the evidence will give him the reason, the justification and the will to change the situation. At least the amendment would allow us to move away from allegation, counter allegation, assertion and anecclote—always a frail basis for statutory policy.

We fear that the Bill may encourage employers to be increasingly zealous in sacking their sick and increasingly hesitant to re-employ them. We truly hope that we are wrong, but we do not know. We need to know and the only way to find out is for the Secretary of State to collect the facts and to bring that report to Parliament. Your Lordships have an honourable record in protecting the rights of the disabled, but those rights have to be based on all our information. It is in that light that I hope noble Lords will support the amendment.

Lord Boyd-Carpenter

My Lords, as always in her speech, the noble Baroness meant well. She always does. However, I wonder whether she realises what a wholly impractical task she seeks to impose upon the Secretary of State. The amendment does not ask for a report as to increases or decreases in unemployment among sick people; it asks for a report on the effects of the Bill on those numbers. If unemployment rises or falls among sick people, how on earth is the Secretary of State to know that that is an effect of the Bill? It would be pure guesswork. It is surely much better to rely on the facts as they become known in the ordinary way than to seek to impose a quite impossible task on the Secretary of State. How can anyone know whether changes that take place in future years —changes take place the whole time—are a result of the Bill?

If one considers the amendment, the Secretary of State is supposed to perform this all but impossible task annually. I do not believe that he can do so. It is only misleading ourselves, and perhaps misleading sick people too, to put such a provision on the statute book. I hope that noble Lords will not do so.

3.45 p.m.

Earl Russell

My Lords, the noble Lord is perhaps somewhat severe in what he said to the principles of research in general. It is, of course, true that in every question of research there is ultimate room for doubt about causation. Nevertheless, in every operation of government and of history we look for correlations and investigate whether it seems likely that those correlations imply a logical connection. The process is familiar. The Government act on its results regularly every year, often with great confidence.

I know the attitude that the noble Lord puts forward. It is that which in my profession we describe as source nihilism. However, I did not know that it had extended its territory any later than the sixth century. I am pleased to welcome the noble Lord into this century but I cannot say that I am the least persuaded by what he said.

On these Benches, we are happy to support the amendment. It deals with two points of fact which have been disputed through every stage of the Bill's progress in both Houses. Like the noble Baroness, we should like to know who is right. Even if in deference to the noble Lord, Lord Boyd-Carpenter, I agree that we may not know with infallible and certain knowledge, there may be a much greater degree of probability in what we say. If one brings in changes and the level of dismissals immediately rises rapidly, then it is at least a plausible hypothesis that those factors are connected. On the other hand, if the level of dismissals should suddenly go down, it is a little unlikely that that conceals a rapid increase due to statutory sick pay.

We accept it is perfectly possible that we may be wrong; everyone may be wrong. In saying that, I should like to believe that we are in the same boat as the Government: at they also accept that they may be wrong and that they, like us, may be prepared to take the risk of finding out. There is nothing to be said against accurate information.

First, the amendment deals with disabilities. Two valid points have been made against each other throughout the Bill. There has been no meeting of minds. The first valid point—I believe that it is not contested on any ground—is that the disabled have a more reliable attendance record as employees than the workforce as a whole. The more that we can use this debate to publicise that fact, the better; we agree with it. The other point, sustained by statistics which the noble Baroness quoted about people being called for interview, is that that fact is not generally perceived by employers. We are dealing with an area in which perceptions are everything. Every time they read the newspapers, the Government probably recognise that perceptions are not necessarily the same as facts. What matters is whether there is a perception that the disabled are likely to be more costly to employ. If there is that perception, it will make people less likely to employ the disabled and the situation will call for remedial action.

On dismissals, I thank the noble Viscount and his officials for the courtesy with which they listened to us during the meeting last Thursday. I was extremely glad of that chance. We believe that there is a considerable risk that employers may dismiss people because they are sick and because it is a great cost to employ them. I understand that the Government think that dismissals because of sickness are not likely to be due to statutory sick pay. I understand that the Government think that the interruption of production is a much more serious problem. That may well be the case, but I am sure that the Government are familiar with the principle of the last straw that breaks the camel's back. There may be a very heavy load on the camel already; but why put on the extra weight which may be just too much?

The Government who stand by free market principles will find it difficult to deny that, if you increase the price of something, you create a disincentive to use it. Therefore if you increase the price of labour which suffers from sickness, you create a disincentive to employing that labour. That is what concerns us. That is what we hope will be monitored. That is where we should like accurate information. We agree entirely with what the noble Baroness said about the difficulty of re-entry into the labour market for this reason. If you lose a job at over 50 years old, it is hard to become re-employed. If people are not employed beyond 50, the actuarial basis of pensions becomes extremely difficult. If the Government do not accept the amendment, it is pickling a very expensive rod for their own backs. I hope that they will think again.

Lord Milverton

My Lords, I support the noble Baroness's amendment. It seems to me reasonable and practical. The principle and ethic underlying it are sound. I leave the complicated details of the Bill to others. However, in taking note of the arguments from all sides, I support the amendment. Principles and ethics arise in such issues. It is about time that such principles and ethics were heard more clearly in this day and age. I hope that Her Majesty's Government will accept the amendment.

Lord Ashley of Stoke

My Lords, I believe that there are compelling reasons to accept the amendment so eloquently put forward by the noble Baroness. I have neither heard nor read of any substance in the arguments put forward for rejecting the amendment. I am unimpressed by the points made by the noble Lord, Lord Boyd-Carpenter. He said that the amendment is impracticable. That is the last thing to be said about the amendment. The point is that it is practicable to find out precisely what is going on. If we do not find out such information when we are able to do so, we live in ignorance.

The noble Lord also said that we should rely on the facts as they become known in the ordinary way. The whole point is that the facts do not become known in the ordinary way. That is why we live in ignorance of all the problems of disabled people. No one knows. Ministers far too often say: "We don't hold this information centrally".

Lord Boyd-Carpenter

My Lords, will the noble Lord allow me to intervene? Will he explain how the Government or anyone else are to attribute to the Bill an increase or decrease in the amount of unemployment among sick people? The Government can undoubtedly obtain the facts as to whether there is an increase or a decrease; but how on earth do they ascertain that the change is a result of this Bill?

Lord Ashley of Stoke

My Lords, I shall be delighted to respond. That can be done perfectly well by social and academic analysis. The reasons for illness and disability are carefully tabulated, all the OPCS reports clearly indicate the causes and the reasons through meticulous, academic analysis. But we have not yet gone far enough; and if the analysis is applied to the Bill, in one year's time we shall find out precisely what is happening and whether the Minister is correct in saying that the Bill has no effect on the employment of disabled people. That is a nonsensical proposition.

I am convinced that this legislation will have a deleterious effect on the employment of disabled people. Employers are not in the business of charity. They want to maximise their profits—understandably so. But there is no point in the Minister saying, as he has already said, that we know that disabled people are good workers. Of course we know that they are good workers, but the employers do not. There are some marvellous employers, and many noble Lords present are associated with fine firms with a good record on disabled workers. However, there are some awful employers, many of whom, it is true, regard disabled workers as being a costly burden. All my experience as Chairman of the All-Party Disablement Group for the past 21 years indicates that that is so, employers do regard disabled people as costly liabilities.

I am also convinced by the high rate of unemployment among disabled workers and by the ignoring and neglect of the quota system. If employers regard disabled workers as a cost liability, it must be a deterrent from taking on and keeping disabled workers. No Minister, in a market-led economy, can deny that—it is impossible.

If my noble friends and noble Lords opposite, as well as the disability organisations who oppose the Bill, are correct, it is crucial that the amendment should be carried so that we can find out the damaging effect of the Bill on disabled people. The amendment is all the more important because of the evasive response of the Minister on Second Reading. The noble Lord, Lord Reay, asked, reasonably, whether the Government would monitor the effect of the Bill. What could be more reasonable than that—to monitor the effects of the Bill? Instead of a direct affirmative to that reasonable request, the Minister merely said that the Government would be considering the effects and would consider whether research should be mounted. That is simply not good enough.

In view of the deep anxieties expressed in the House by noble Lords, disablement organisations and disabled people themselves, the Government have a moral obligation to monitor the effects of the Bill when it becomes an Act through an annual report. The Minister says that there will be discussions about the consequences of the Act. Again, that is not good enough because the Government should convey to noble Lords all the information they receive. The fate of disabled people should not be buried in Civil Service files. The information should be reported to this House so that noble Lords can decide what should be done and how the Act should be amended, if necessary.

I conclude by giving the Minister some information which has not yet been publicly disclosed. I believe that it destroys one of the main arguments which he put against the amendment when he was trying to answer it. In Committee, the Minister rejected the request by my noble friend Lord Carter for an annual report. One of his main arguments, if not the main argument which he put forward for rejecting an annual report was: The Prime Minister has asked my right honourable friend the Minister of State for Social Security and Disabled People to work with the all-party disablement group to identify areas for further action where discrimination could be eliminated at little or no cost".—[Official Report, 25/1/94; col. 927.] That is marvellous ! The Government are so actively involved with the all-party group in solving the problems; but I have to tell the Minister that I personally have been deeply involved in the discussions with the Prime Minister and all the negotiations with the Minister. Unfortunately for the Minister's argument, after the last negotiations recently, the officers of the All-Party Disablement Group and every member of that group present at the negotiations decided to break off the negotiations and withdraw from them because we were dissatisfied with the progress. My guess is that at the meeting at which I shall be present tonight at five o'clock, when the proposal is put to the All-Party Disablement Group, the members will fully endorse the recommendation of the officers to withdraw from negotiations. So I do not believe that the Minister has any substance in his argument.

The very least we can do for disabled people is to provide an annual report so that this House and another place are able to assess the effects of the Bill. It is a modest, reasonable proposal and I hope that noble Lords will vote for it.

Baroness Elles

My Lords, we have been listening to a confused discussion. So far as I can see, there are two main issues. One is to ask the Government to accept the amendment and to analyse the effects of the Bill on the employment of the disabled as a result of the withdrawal of statutory sick pay. The other is how the disabled will be treated when they are sick, when they return or when they do not return to employment. Those are two completely different issues and I hope that on that ground the Government will reject the amendment.

However, that does not stop the anxiety expressed all round the House of the disabled in employment which I believe is a separate issue. There are a whole lot of reasons why the disabled are employed or not employed. There are many statistics, in particular the latest from the Department of Employment which I have obtained which showed that in 1991 there were 500 million absentee days. How many of those were of the disabled? Probably extremely few. A good many noble Lords in this House have worked with the disabled and know that they are often in better health in their jobs than those who skive off and play golf on Friday, Saturday, Monday and Tuesday. I do not think that the figures are comparable.

Therefore, I hope that the Minister will reject the amendment. It is totally impractical, as my noble friend Lord Boyd-Carpenter said. However, I hope that the Minister will give some indication of how the Government and all those interested can monitor how the disabled are fitted into the workforce so that when, for some reason or another, they have to leave, they know what are the opportunities for obtaining a job. That is where I believe monitoring is needed. Everyone would agree that some form of monitoring is needed for the security and working possibilities for the disabled. I think that we all support that.

Perhaps my noble friend the Minister can give an indication of the sympathetic and compassionate way in which his department looks at the problem. This Government have a good record of helping the disabled. I do not believe that refusal of the amendment would in any way detract or denigrate from that record with regard to the disabled. However, I hope that the Minister can help us in dealing with this problem.

4 p.m.

Lord King of Wartnaby

My Lords, the noble Baroness spoke eloquently with compassion and concern for disabled people, which I am sure are feelings shared by the entire House. But it occurs to me that the amendment would create an administrative nightmare.

I believe that 90 per cent. of the people employed in this country are employed by firms whose total labour force numbers around 25. The big firms—as they are described —have little problem with these matters. They are able to organise and deal with them. In a practical sense they must bear in mind what the rest of the employees in a great company think if the matter is not treated seriously and properly. But when one comes to someone with five, 10, 15 or 20 employees—I believe those to be the vast majority —and one says, "Now we impose on you an additional charge of 10 per cent. for employing someone", one creates real difficulty.

The problem arises for the small employer. If a way can be found of monitoring the situation and it can be brought to this House in a way that can be understood, go ahead. Having said that, I have only sympathy, compassion and feeling, as I am sure do other noble Lords, for what the noble Baroness said. However, the solution to the problem must be clearly thought out. It is a wonderful idea. Nobody wants to be oppressive to people who are unemployed and who cannot be re-employed because they were sick. But we must consider whether we are getting into a tangle from which we cannot extricate ourselves.

Viscount Astor

My Lords, I listened carefully to the noble Baroness, Lady Hollis, as she explained the reasons why my right honourable friend the Secretary of State should publish and lay before Parliament an annual report on the effects of this legislation on the employment of people with disabilities and on the level of dismissals connected with sickness or statutory sick pay. It has been claimed that abolition of the 80 per cent. SSP reimbursement arrangements will affect the job prospects of people with disabilities and those with poor health records, and will lead to the dismissal of sick workers. While I can understand and appreciate the anxieties expressed, I must say at the outset that I cannot agree with those claims. The Opposition claimed that people with disabilities would suffer when the statutory sick pay scheme was first introduced in 1983—over 10 years ago—and on subsequent occasions when changes were made to the structure of the scheme. That proved not to be the case.

We do not accept the claim that abolition of the 80 per cent. reimbursement rate will lead to discrimination against people with disabilities or poor health records. Nor do we expect there to be any changes in the pattern of employment of people with disabilities as a result of the change. All the evidence suggests—and the noble Earl, Lord Russell, agrees—that people with disabilities make very good employees and indeed often have a more reliable sickness absence record than other employees.

People with the right attitude to work and who have the necessary skills will always be attractive to employers because those attributes are more important than their past health record. Recent research carried out on behalf of the department by the independent Centre for Research in Social Policy—whose report will be published shortly—indicates that the reduction in SSP reimbursement from 100 per cent. to 80 per cent. in April 1991 had no effect on the willingness of employers to recruit workers with disabilities. Their sick absence records are reported to be no worse, and are often better, than those of their able-bodied colleagues. Furthermore, that study detected a more positive attitude among employers to the recruitment of workers with disabilities. That is an important point.

In the Government's view, there are many other factors of far greater importance in determining job opportunities for disabled people. Both this department and the Department of Employment have developed policies to promote the employment of people with disabilities. Disability working allowance, which we introduced in April 1992, promotes greater opportunities for employees with disabilities by providing them with financial support while in employment.

It has been the endeavour of successive governments to increase awareness that disabled people are good employees and have a valuable contribution to make. The Government share the aim of the All-Party Disablement Group of ending any possible discrimination against disabled people. We believe that the best approach is by a programme of education and persuasion, backed up where necessary by targeted legislation.

I must say to the noble Lord, Lord Ashley, that if he is right that the group is breaking off negotiations with the Government, that may not help those people about whom he is concerned. Will the breaking off of negotiations help the people with disabilities?

Lord Ashley of Stoke

My Lords, I believe it will help. It will draw the attention of the Prime Minister to the fact that Members on both sides of the House of Lords and in another place feel that the argument about persuasion and education is a bogus one because it simply has not worked. We need the same kind of legislation that exists in the United States and elsewhere; that is, to protect the rights of disabled people.

Viscount Astor

My Lords, it is obviously a decision that the all-party group must make. But it does not seem to me that breaking off negotiations with my right honourable friend the Minister of State will necessarily help the cause of those whose concerns the group aims to promote.

I should point out that nine out of 10 employees work for employers with occupational sick pay schemes which usually pay more than the SSP due. If, as the Opposition are arguing, financial costs are a factor which affects working people with a disability, employers would have already let those employees go. There is no evidence to that effect.

Not only is the amendment not needed, it is also potentially damaging to the interests of those it seeks to help. It would send the wrong message that, far from being excellent employees, people with disabilities needed special monitoring by Parliament. That could serve to undermine our efforts to persuade employers that such workers are well worth employing.

Similar considerations apply to that part of the amendment which deals with the level of dismissals connected with sickness or the payment of statutory sick pay. I should explain that SSP legislation already prevents an employer from ending an employee's contract of service solely or mainly for the purpose of avoiding his SSP liability. In that situation, the law provides that the employer's liability to pay continues until entitlement ends for some other reason—usually when the employee is fit enough to resume working. If that happens, all the employee has to do is to bring the matter to the attention of the Benefits Agency when prompt action will he taken to resolve the issue.

The noble Baroness cited examples given by the National Association of Citizens Advice Bureaux. They should be viewed in context. There are about 1.2 million employers liable to pay SSP. At any given time, some 330,000 employees are entitled to SSP. That is a lot of employers and a lot of employees. It is not surprising that a few cases will come to light where an employer seeks to avoid his legal liability whether it be SSP or any other legal liability. The Government condemn such practices and urge the CAB and any other body or organisation which uncovers such malpractice to bring the matter to the attention of the local social security office at once. That will trigger action to have the matter dealt with promptly. The Government do not however believe that the practice is at all widespread.

The noble Baroness claimed that of those whose invalidity benefit had ended because they were fit to work, only 12 per cent. were able to find work. I must tell the noble Baroness that she has misunderstood the results of the study of IVB recipients. Twelve per cent. of the entire sample had found work by the end of the study period, not 12 per cent. of those whose benefit had ceased because they were fit for work. The majority of those studied—80 per cent. —were still receiving IV13. We must remember that in any one year about 320,000 people come on to NB and about 200,000 come off it.

The noble Baroness also mentioned the Spastics Society research that showed, she said, that employers are six times as likely to turn down for an interview a person with disabilities as to turn down a person with no disabilities. That report, which was in 1990, involved sending postal applications for secretarial jobs in London. Two letters were sent for each post—one from a fictional disabled person and one from a fiction non-disabled person, both with similar skills arid experience. I do not accept that the responses to fictional job applications for one particular type of employment in one particular area can be used to represent a nationwide picture of employment prospects for disabled people with a variety of skills. The noble Baroness may be interested in the results of research in 1993 by the Institute of Manpower Studies which showed that from a random sample of almost 2,000 employers in the private sector, more than half who responded to the survey said that they employed disabled workers.

The growth in occupational sick pay over recent years demonstrates employers' willingness to accept much of the responsibility for catering for the short-term sickness absence of their employees. If financial costs were the main consideration, employers would have been inclined to react in the way noble Lords opposite have claimed when the reimbursement rate was reduced to 80 per cent. in 1991.

The evidence that the CABs produced and the evidence of the noble Baroness is anecdotal evidence. I do not believe that anecdotal evidence is a sound basis for primary legislation. I can tell the noble Lord, Lord Ashley, and indeed my noble friend Lord Reay, who brought the matter up at an earlier stage, and my noble friend Lady Elles that we shall be monitoring the effects of the change both in the course of the Contributions Agency's routine visits to employers and by other means such as the feedback that we get from employers, employees and their representative organisations. We have already introduced a procedure to monitor the reasons given by an employer for not paying SSP to an employee and will be scrutinising those reasons closely. The Government will also ensure that the results of monitoring will be made available. I hope that my noble friends will be reassured by what I have said on that basis.

In the light of the assurances I have given about monitoring, I hope that the noble Baroness will withdraw her amendment; otherwise I would ask your Lordships to reject it.

Baroness Hollis of Heigham

My Lords, by leave of the House and before the Minister sits down, will he answer one question? Is he saying that the department could not do what the amendment asks?

Viscount Astor

My Lords, the case has been carefully made by my noble friend Lord Boyd-Carpenter as to why the amendment would not work. I have said that the department will monitor the situation. The noble Baroness must accept the Government's commitment to do that monitoring and to make the results available.

4.15 p.m.

Baroness Hollis of Heigham

My Lords, I thank all those who have taken part in the debate. Even if our views around the House are very different, I appreciate the tone of the contributions. We are all seeking the best way forward to ensure that those who are chronically sick and disabled remain in work and can re-enter work. I am sure that we all share that view.

Perhaps I may take up some of the points made by the contributors to our brief debate. To some extent I concede the point made by the noble Lord, Lord Boyd-Carpenter, that the amendment does not go as wide as it would if this were a general Bill about disability. He is right. We are restricted quite properly by the Long Title of the Bill which means that any such report must be based on what the Long Title of the Bill is there to do. But the noble Lord did say—and my noble friend Lord Ashley picked up the point—that instead we could rely on, facts as they become known in the ordinary way". That is precisely the issue. We want to know what the facts are because they do not become known in the ordinary way. If we can persuade the noble Lord, Lord Boyd-Carpenter, that without proper monitoring by the Secretary of State based on local returns to local offices we will not have those facts known to us, perhaps we can hope that he may join us in supporting the amendment.

I would be entirely happy, if it would bring us the support of the noble Lord, Lord Boyd-Carpenter, to withdraw the amendment and accept a redraft, provided only that the Government accepted the principle and would come back at Third Reading with an amendment which would give us the information as to whether the provision will worsen the situation of the chronically sick and disabled. I listened hard but to my great regret I do not think the noble Viscount gave us that assurance.

If in future we were to have wider collection, that would be splendid. However, at the very end of his remarks the noble Viscount said: I do not believe that anecdotal evidence is a sound basis for primary legislation". He used that as an argument against the anecdotal evidence. I was the first to say it was anecdotal. I quoted from the CABs. Again, that is the answer to the noble Lord, Lord Boyd-Carpenter. The Minister answered the noble Lord, Lord Boyd-Carpenter. What can we do if we have nothing other than anecdotal evidence to go on? It is precisely because we believe we owe the disabled the integrity of information that we are moving the amendment.

The noble Baroness, Lady Elles, quite rightly said that the sacking of the sick in work and the re-employment of the disabled are separate issues. She is entirely right that those are separate constituents but all the longitudinal studies—by Erens and Ghate and so on—for the DSS show that when the chronically sick who go on to become a long-term charge on employers leave work the only opportunity most of them have to re-enter the labour market is with their previous employer. That is where the two groups that the amendment seeks to aid and respond to are conjoined. So while the noble Baroness is conceptually right in practice, if someone loses his job because he is chronically sick—perhaps with repeated asthma or because he has developed multiple sclerosis or mental health problems—his only likely future employer is his past employer. All the statistics show that. If we can help the existing employer to retain someone, that is a much more productive way forward than asking the employer subsequently to re-employ someone whom he has released.

Baroness Elles

My Lords, I am grateful to the noble Baroness for giving way and for agreeing with some of the things that I said. But would she also agree that, as my noble friend the Minister has said that the Government are prepared to monitor the question of the disabled, it is not entirely a question of the effect of SSP, which is the point of the noble Baroness's amendment? Does she accept that, by withdrawing the amendment and accepting the undertaking given by my noble friend the Minister, that might meet her problem?

Baroness Hollis of Heigham

My Lords, if the noble Viscount were to say to the House—I invite him to do so in the spirit of the remarks made by the noble Baroness, Lady Elles—that I should withdraw the amendment and that he in turn would bring back an amendment to put on the face of the Bill a clause to monitor the effects both in general of employment patterns for the disabled and in particular, as far as it can be adduced, the impact of the Bill, I would be delighted to withdraw the amendment. I invite the Minister so to do.

Viscount Astor

My Lords, perhaps I may, with the leave of the House, answer the noble Baroness. I do not believe that that is what my noble friend Lady Elles said. My noble friend said that the noble Baroness should withdraw the amendment because I had given the Government's commitment to monitor the effects. There was nothing about bringing forward an amendment of my own.

Baroness Hollis of Heigham

My Lords, if the noble Viscount is willing to give a commitment that there will be monitoring, what is his hesitation about putting it on the face of the Bill?

Viscount Astor

My Lords, with the leave of the House, I have explained clearly and at quite great length why the amendment is unsatisfactory. If she does not understand all that I have said, I am sure that she will be able to study Hansard.

Baroness Hollis of Heigham

My Lords, with the leave of the House, I have every respect for the Minister, who on a previous amendment did his best to be helpful. I do not think that he advances his position by appearing to patronise us when we indicate to him that if what he says is correct—I am sure that his integrity is unchallenged in this respect—we should be seeking to bind future Secretaries of State to deliver what he is now offering. If what the Minister says is right and the Government propose to do this, he can have no objection to putting it on to the face of the Bill to ensure that there is proper parliamentary scrutiny. Undertakings are well intentioned but they are not the same as primary legislation and the Minister knows that.

I shall pick up a couple more points and then conclude. The noble Lord, Lord King—I am delighted to welcome him to this debate—made the point, which is well taken, that such an amendment might produce an administrative nightmare for small firms, particularly those with 10 or 20 employees. Under the terms of the Bill there will be no financial problem for them because they are precisely the group aided by the amendment that the Government accepted in principle earlier this afternoon where statutory sick pay will be fully refunded for any employees. The problem should be far less for these smaller firms.

However, my understanding is that at the moment most of the information requested—the reason for leaving work and so on—is already held locally by unemployment benefit offices but, because it is held locally, it is not collated nationally, it is not focused and it is not brought to the attention of Parliament. What this amendment—which is quite simple and not expensive; in fact it is very cheap—does is to focus the information we already have and bring it to bear on the position of the disabled and the chronically sick. If in the process it encourages some firms to adopt better practices and discourages less scrupulous firms from going in for bad practices, that is surely to be welcomed.

The noble Viscount, Lord Astor, thought that this would send the wrong message to the disabled. He is right; we said in Committee that the disabled in practice have good work records. We are not dealing with their motivation but with the employer's perception when it comes to employing them. The noble Viscount, as I say, said that this would send the wrong message. All I can say is that the disability organisations are fearful about the Bill. If I may say so, it is no use the noble Viscount saying that they are unwise or foolish to be fearful. They are fearful; but their fears would be allayed if they believed that, conscientiously, the information relating to the disabled was scrutinised, monitored and regularly brought before Parliament for survey.

The noble Viscount went on to say regarding the previous legislation—cutting 100 per cent. down to 80 per cent. —that it proved not to be the case that disabled people were laid off. How does he know? There are now three times as many unemployed disabled people as unemployed able bodied people. So how does the Minister know that? I do not know, and we do not know precisely what this amendment would seek to deliver. The noble Viscount went on to say that he did not expect any changes in the pattern of employment. How does he know whether there will be changes? How will he know if such changes have occurred unless he accepts this amendment?

I am not saying that the amendment would uniquely protect or improve the situation of the disabled and the chronically sick; the noble Baroness, Lady Elles, is quite right on this point. But it may prevent the position of the disabled being worsened if we find out that 100 per cent. statutory sick pay is, as my noble friend Lord Ashley said, the last straw which breaks the camel's back. I appeal to your Lordships on this. This House, far more than the other place, has had an honourable record in protecting the rights of the disabled. In the short time I have been in the House your Lordships have passed amendments to improve the lot of the disabled, for example, in terms of the council tax and in relation to sufferers from Alzheimer's disease. The Government were generous enough to accept such amendments and have passed amendments improving the situation of the disabled so far as employment legislation is concerned.

Your Lordships have an honourable record. I hope that tonight, given that the Minister could not give us the assurances that we seek, you will continue with that record. The disabled are not looking for charity. They are looking for the dignity of information on which we can all make sound public policy. We cannot do that without the facts, and this amendment is simply saying, "Let us collect the information on which either the Secretary of State's assertions are proved to be correct"—which I hope they are—"or the fears of the disability groups are proved to be valid"—which I hope they are not. But we cannot know unless we have the information. It seems to me that that is the very least we owe the disabled. I propose to seek the opinion of the House.

4.25 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 111; Not-Contents, 158.

Division No. 1
CONTENTS
Acton, L.	David, B.
Addington, L.	Dean of Beswick, L.
Airedale, L.	Dean of Thornton-le-Fylde, B.
Allen of Abbeydale, L.	Desai, L.
Archer of Sandwell, L.	Donoughue, L.
Ashley of Stoke, L.	Dormand of Easington, L
Aylestone, L.	Eatwell, L.
Barnett, L.	Ennals, L.
Beaumont of Whitley, L.	Ezra, L.
Birk, B.	Fisher of Rednal, B.
Blackstone, B.	Fitt, L.
Bonham-Carter, L.	Foot, L.
Boston of Faversham, L.	Gallacher, L.
Bottomley, L.	Gladwyn, L.
Bridges, L.	Glenamara, L.
Broadbridge, L.	Gould of Potternewton, B.
Bruce of Donington, L.	Graham of Edmonton, L. [Teller.]
Carmichael of Kelvingrove, L.	Greene of Harrow Weald, L.
Carter, L.	Harris of Greenwich, L.
Castle of Blackburn, B.	Haskel, L.
Chappie, L.	Healey, L.
Cledwyn of Penrhos, L.	Hilton of Eggardon, B.
Clinton-Davis, L.	Hollick, L.
Cocks of Hartcliffe, L.	Hollis of Heigham, B.
Cudlipp, L.	Howell, L.

Hunt, L.	Ogmore, L.
Hutchinson of Lullington, L.	Perry of Walton, L.
Jay, L.	Pitt of Hampstead, L.
Jay of Paddington, B.	Plant of Highfield, L.
Jeger, B.	Prys-Davies, L.
Jenkins of Hillhead, L.	Rea, L.
Jenkins of Putney, L.	Redesdale, L.
Kagan, L.	Richard, L.
Kennet, L.	Ritchie of Dundee, L.
Kilbracken, L.	Robson of Kiddington, B.
Kinloss, Ly.	[Teller.]
Kirkhill, L.	Rochester, L.
Listowel, E.	Russell, E.
Lockwood, B.	Sainsbury, L.
Longford, E.	Sefton of Garston, L.
Lovell-Davis, L.	Serota, B.
McIntosh of Haringey, L.	Shepherd, L.
Mackie of Benshie, L.	Southwark, Bp.
Mallalieu, B.	Stallard, L.
Mar, C.	Stoddart of Swindon, L.
Mason of Barnsley, L.	Strabolgi, L.
Merlyn-Rees, L.	Taylor of Blackburn, L.
Meston, L.	Taylor of Gryfe, L.
Milner of Leeds, L.	Tenby, V.
Milverton, L.	Turner of Camden, B.
Mishcon, L.	Varley, L.
Morris of Castle Morris, L.	Wallace of Coslany, L.
Mulley, L.	Wharton, B.
Nathan, L.	White, B.
Newcastle, Bp.	Williams of Elvel, L.
Nicol, B.	Williams of Mostyn, L.
NOT-CONTENTS
Aberdare, L.	Elibank, L.
Addison, V.	Ellenborough, L.
Alexander of Tunis, E.	Elles, B.
Allenby of Megiddo, V.	Elliott of Morpeth, L.
Archer of Weston-Super-Mare, L.	Elton, L.
Arran, E.	Ferrers, E.
Astor, V.	Flather, B.
Astor of Hever, L.	Fraser of Carmyllie, L.
Barber of Tewkesbury, L.	Fraser of Kilmorack, L.
Belhaven and Stenton, L.	Gainford, L.
Bellwin, L.	Gainsborough, E.
Beloff, L.	Gardner of Parkes, B.
Birdwood, L.	Geddes, L.
Blatch, B.	Gilmour of Craigmillar, L.
Boardman, L.	Gisborough, L.
Borthwick, L.	Goschen, V.
Boyd-Carpenter, L.	Gray of Contin, L.
Brabazon of Tara, L.	Gridley, L.
Braine of Wheatley, L.	Haddington, E.
Brougham and Vaux, L.	Hailsham of Saint Marylebone, L.
Butterworth, L.	Halsbury, E.
Buxton of Alsa, L.	Harding of Petherton, L.
Cadman, L.	Harvington, L.
Campbell of Alloway, L.	Hayhoe, L.
Campbell of Croy, L.	Henderson of Brompton, L.
Carnegy of Lour, B.	Henley, L.
Carnock, L.	Hesketh, L.
Chalker of Wallasey, B.	Holderness, L.
Charteris of Amisfield, L.	HolmPatrick, L.
Chelmsford, V.	Hood, V.
Chesham, L.	Hooper, B.
Clanwilliam, E.	Howe, E.
Clark of Kempston, L	Hylton-Foster, B.
Cockfield, L.	Jenkin of Roding, L.
Coleraine, L.	Johnston of Rockport, L.
Colwyn, L.	Kenyon, L.
Courtown, E.	Killearn, L.
Cox, B.	King of Wartnaby, L.
Cranborne, V.	Kinnoull, E.
Cumberlege, B.	Kitchener, E.
Davidson, V.	Lauderdale, E.
Dean of Harptree, L.	Leigh, L.
Denham, L.	Liverpool, E.
Dixon-Smith, L.	Long, V.
Dormer, L.	Lucas, L.
Downshire, M.	McColl of Dulwich, L.
Eden of Winton, L.	Mackay of Clashfern, L.

[Lord Chancellor]	Renton, L.
Marlesford, L.	Rippon of Hexham, L.
Marsh, L.	Rodger of Earlsferry, L.
Merrivale, L.	St. Davids, V.
Mersey, V.	Saint Levan, L.
Middleton, L.	Salisbury, M.
Miller of Hendon, B.	Savile, L.
Monson, L.	Selborne, E.
Morris, L.	Selkirk, E.
Mottistone, L.	Sharples, B.
Moyne, L.	Simon of Glaisdale, L.
Munster, E.	Skelmersdale, L.
Murton of Lindisfarne, L.	Slim, V.
Newall, L.	Stewartby, L.
Norrie, L.	Stockton, E.
O'Cathain, B.	Strathclyde, L.
Orkney, E.	Strathmore and Kinghorne, E.
Orr-Ewing, L.	[Teller.]
Oxfuird, V.	Sudeley, L.
Palmer, L.	Swansea, L.
Park of Monmouth, B.	Swinfen, L.
Pearson of Rannoch, L.	Thomas of Gwydir, L.
Peel, E.	Torrington, V.
Pender, L.	Trumpington, B.
Peyton of Yeovil, L.	Ullswater, V. [Teller]
Plummer of St. Marylebone, L.	Vivian, L.
Prentice, L.	Wade of Chorlton, L.
Pym, L.	Wakeham, L.
Quinton, L.	[Lord Privy Seal]
Radnor, E.	Westbury, L.
Rankeillour, L.	Whitelaw, V.
Rawlinson of Ewell, L.	Young, B.
Reay, L.	Zouche of Haryngworth, L.
Rees, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.33 p.m.

Baroness Turner of Camden

moved Amendment No. 4: After Clause 1, insert the following new clause: ("Monitoring of impact of Act on women. —The Equal Opportunities Commission shall include in its annual report consideration whether this Act has had an impact upon the employment of women."). The noble Baroness said: My Lord, in Committee I proposed an amendment to the effect that the Equal Opportunities Commission should have an obligation to publish an annual report on the effects of the Bill (when it is an Act) on the employment of women. The noble Viscount was not disposed to accept that amendment, pointing out that the EOC issues an annual report anyway. I replied, at col. 930 of the Official Report, that I was well aware of that since I was a member of the EOC for some six years. What I was seeking, however, was a specific commitment to monitor what happens when the Bill is on the statute book.

The House will know from the debate that we have just had that we have been particularly concerned about the possible effect of this Bill on vulnerable people. We have received briefings from NACAB, which has been referred to on a number of occasions, including in the previous debate, which appear to indicate fairly clearly that many vulnerable and poor people do not get their entitlement now when employers can claim back 80 per cent. of what they have paid. A great deal of that avoidance of payment occurs in smaller firms or firms of the less reputable kind—and there are some of those. The people who are thus disadvantaged and deprived of their rights are often those in low-paid or relatively casual employment.

Those are the very people who are likely to be disadvantaged by the disappearance of the wages councils, to which my noble friend Lady Hollis referred yesterday. I cannot help it if certain noble Lords, particularly the noble Lord, Lord Boyd-Carpenter, do not like our constant references to the wages councils. However, the fact remains that they were intended as some form of protection for the poorly paid and they no longer exist as a result of government legislation. Wages for those people are therefore likely to be lower than ever.

Furthermore, women are vulnerable in the sense that they may need to take maternity leave and can suffer from maternity-related illnesses. That may give some employers an incentive to discriminate against their employment as, if such employees are away through illness, employers will in future have to foot the whole bill themselves without recovering anything from the Government.

Incidentally, I see from the most recent report about work-related illnesses that is available from the Health and Safety Executive that staff with a higher risk of particular illnesses include: teachers, for whom the reported stress and depression caused by their work was four times the average for other occupations; nurses, who reported a high risk of back problems caused by their work, amounting to three times the average for other occupations; and clerical workers, for whom the reported risk of headache and eye-strain caused by their work was over twice the average for other occupations". It will be noted that those are all occupations in which women predominate in the workforce. That is also true for the industries that were formerly covered by the wages councils and industries where there is a great deal of low pay and casual and part-time work.

Therefore, there seems good reason to look at the way in which this legislation will affect the employment of women. The Bill is a new departure. For the first time, employers will have to bear the full monetary risk of sickness as well as having to bear the cost of replacements while people are ill, which they have always had to do. I know that it is claimed that they will have lower NI contributions to pay; nevertheless there could well be a temptation not to pay (particularly for less scrupulous employers) if they are not getting any reimbursement from the Government.

We therefore feel that there is a case for monitoring what happens once the Act is in force. We have accepted what the Minister said in Committee and that the EOC has to issue an annual report anyway. The new amendment therefore stipulates that the annual report should in future contain information as to the effect of the Bill on the employment of women. It does not impose any burden on the Secretary of State or require a special report from the Secretary of State to Parliament, but it writes into the Bill a role for the EOC and therefore some means of monitoring whether the employment of women is affected by this new legislation.

As we said in the previous debate, there is no means of knowing now exactly whether or not the legislation will have an effect. We accept that there is a degree of uncertainty about that. It seems to me that that is all the more reason to have some mechanism in place for monitoring the legislation, and the appropriate mechanism for monitoring the employment of women appears to be the EOC. I hope therefore that this time around the Minister may feel disposed to accept our amendment. I beg to move.

Baroness Robson of Kiddington

My Lords, in the unfortunate momentary absence of my noble friend Lord Russell, I should like to express support for the amendment from these Benches.

Viscount Astor

My Lords, there is no evidence to suggest that the introduction of the SSP scheme in 1983 or any subsequent changes to the scheme have had an adverse impact on the employment of women. Indeed, the percentage of women employees grew from 41 per cent. of all employees to 47 per cent. between 1979 and 1992. I acknowledge that those figures include both full-time and part-time employees. But even if we measure the number of full-time women employees in 1984 against the number in 1992, the growth rate is about 15 per cent. There is no evidence there that SSP has affected women's employment prospects.

I should also remind the House that all the indications are that the job prospects of women are likely to continue to grow. The Institute of Employment Research at Warwick University has produced projections of women's employment trends: o the end of the century. Its research suggests that total employment will increase by about 2 per cent. up to the year 2000. Women are, however, estimated to increase their share of total employment by around 4 per cent. during the 1990s. Furthermore, projections from the Department of Employment suggest the proportion of women in the workforce will continue to grow. Women are projected to account for more than 80 per cent. of labour force growth by the year 2001.

The Government are confident that the changes in this Bill will have no adverse impact on women's job prospects. On the contrary, all the evidence suggests that the employment opportunities for women have increased steadily and will continue to do so. There is no evidence to suggest that they have been or will be affected by measures such all the availability of SSP. As I said in Committee, the amendment in any event is unnecessary. Under Section 56 of the Sex Discrimination Act 1975 the Equal Opportunities Commission is already required to publish an annual report on its activities during the year.

Each report shall include a general survey of developments during the period to which it relates in respect of matters falling within the scope of the commission's duties. The EOC, therefore, already has the ability to include reference to any legislation which may have had an impact on women's employment prospects if it so wishes. The precise content of the commission's annual report, however, is a matter for the commissioners, not the Government. It would be open to the EOC to publish its views on this or any other matter at any other time or to seek a meeting with Ministers. In my view, to prescribe the activities of the EOC in the way suggested would be inconsistent with its statutory independence to decide for itself how best to achieve its aims and objectives in whatever way it considers appropriate.

It should be for the EOC to decide what it wishes to include in its report. We do not want to go down the road of the Government prescribing in an Act of Parliament what should be included. Therefore we do not consider the amendment appropriate. I realise that the noble Baroness, Lady Turner, has great experience of these matters. She was a member of the commission. I hope that with that explanation she will feel able to withdraw the amendment.

Baroness Turner of Camden

My Lords, I am disappointed that the Minister does not feel able to accept our reworded amendment. It is true, as he said, and as I accepted in Committee, that employment among women has increased. I hope that it will go on increasing. But, as I said earlier, this is a new departure. For the first time employers are being asked to bear the full weight of SSP, whereas previously they were at least able to claim back 80 per cent. We have no idea how that will affect employment in the future of women or vulnerable groups such as the disabled whom we discussed on a previous amendment.

I note that the Government are confident that the scheme will not have an adverse impact upon the employment of women and expect the employment of women to increase. I hope that they are right, but we cannot tell at this point. It is true that the EOC has the obligation to produce an annual report, but it is an annual report of a general nature covering all aspects of its work. I do not think that the EOC would have objected to this nudge from the Government and Parliament in the direction of its paying special attention to the effects of this piece of legislation.

However, I do not believe that there is much point in pressing the amendment to a vote at this stage. I can only hope that what has been said on both sides of the argument this afternoon will prompt the EOC, which of course watches what happens in relation to such matters, to pay attention to this area when it makes its report after the Bill has been in operation for a year. I hope that it will pick up the tabs and tell us what has been happening in the intervening period. With those few remarks, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

In The Title:

[Amendment No. 5 not moved.]