3 March 2021

Our broken sick pay system risks prolonging the pandemic

By Simon Hodgson

Emanuel Gomes spent the last few hours of his life finishing his shift as a cleaner at the Ministry of Justice. It was the height of the first wave of the pandemic, and while most civil servants were working from home, Gomes was still travelling into central London. He fell ill at work on 24 April, and died at home a few hours later. His brother said Emanuel “knew that if he didn’t work … he would get to the end of the month and wouldn’t have enough money”.

It’s no surprise people have money worries. An employee on Statutory Sick Pay – the UK’s minimum safety net for those unable to work due to sickness – stands to receive just £95.85 a week. To add insult to injury, two million workers don’t meet the earnings requirement to get SSP in the first place, and agency workers are often told – incorrectly – that they are ineligible.

In the run-up to the Budget there has been a lot of debate about extending the Universal Credit uplift to help people who are struggling in the current crisis. But this has distracted from another roadblock standing between the Prime Minister and successful suppression of coronavirus  – it’s what the Chief Medical Officer recently described as the need to “reduce disincentives to self-isolate”.

In plain English, that means scientists advising the Government are worried that people who should be self-isolating to prevent the spread of coronavirus aren’t doing so, because, like Gomes, they can’t afford to miss work.

Following his death, the MoJ strongly denied claims of an outbreak linked to its headquarters, and a post-mortem cited hypertensive heart disease as the probable cause of death. In July, the Department and its contractor, OCS, announced staff would now receive full pay while self-isolating, backdated to 1 April.

But it shouldn’t take a man’s death to bring the inadequacy of sick pay to public attention. The Government was aware of these issues long before coronavirus hit. New Labour explored making the system simpler in 2006. In the final days of Theresa May’s premiership, the Government published a green paper pointing out that “by international standards, the SSP rate in the UK is low” and that this can threaten your financial security and make your recovery from illness more difficult.

Despite understanding its vital importance, Ministers did not swiftly move to increase SSP at the start of the pandemic. There is still no sign of it happening, 18 months later.

Perhaps they felt they were at risk of backing themselves into a policy corner, forced to make permanent changes to SSP as a result of a temporary event that would be difficult to unwind later. Perhaps it is because the 2019 decision not to raise SSP’s low rate, described as “part of a wider package of labour market policies which aim to create a business-friendly environment”, now looks so unpalatable in hindsight.

Whatever the reasoning behind not increasing SSP, you can’t deny the effect it’s had: the UK now has the lowest mandatory sick pay for Covid sufferers in the OECD when compared to average earnings.

There’s no reason to think firms would go bust if SSP were increased to help people self-isolate. Employers can already claim back these costs from HMRC. The alternatives – emergency self-isolation payments and encouraging claims to Universal Credit – create more bureaucracy while leaving people waiting desperately for help.

The emergence of the Brazil variant has shown that no matter how well the NHS is rolling out vaccines, we may well find ourselves caught out by a new strain of the virus that spreads before a new inoculation can be developed and manufactured. That is, if we persist in forcing workers in a precarious financial position to weigh the risk of spreading the virus against the risk of being unable to put food on the table.

Failing to reform sick pay at the next Budget will make it that much harder for us to end the merry-go-round of lockdowns and finally put paid to the pandemic.

Increasing SSP can be done at the stroke of a Minister’s pen. It’s the most effective way to improve the efficacy of Test and Trace, won’t cost employers a penny, and gives workers immediate immunity to the financial effects of the coronavirus.

The only question most people are likely to have is – why didn’t we do it sooner?

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Simon Hodgson led work and health strategy at the Department for Work and Pensions. He is now Head of Public Policy at Unum., an employee benefits provider.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.