Ministers are under pressure to increase the basic rate of statutory sick pay (SSP) from £3 an hour for a full-time worker, amid concerns that hundreds of thousands of people a year are left without adequate financial support to pay essential bills while off work.
The government will launch a consultation on Monday to coincide with the second reading of its employment rights bill, under which workers will get paid sick leave from day one, with those on earnings below the threshold of £123 a week eligible.
Campaigners have welcomed the changes, but they want ministers to go further and raise sick pay, which is fixed at £116 a week and pegged to the inflation rate. They argue that the low rate pushes vulnerable people into poverty.
In a letter to Keir Starmer, a group of charities including Citizens Advice, Macmillan Cancer Support, Mind and Maggie’s called on the government to amend the bill so ministers can increase sick pay amid the worsening health of working-age people.
“Hundreds of thousands of working people who are each year diagnosed with infectious diseases, cancer, mental health problems or serious injuries will still find themselves without adequate financial support to pay essential bills like food, rent and heating,” they wrote.
“There is a wide-ranging body of evidence, medical, academic and from leading UK thinktanks and charities, that suggests the current SSP system harms workers and is self-defeating for employers and the government alike.
“This situation risks holding back the government’s laudable mission to grow the economy and bolster our NHS.”
The intervention came as a report by WPI Economics, led by the welfare reform expert Matthew Oakley, found that increasing the rate could reduce days off by stemming the flow of unwell workers on to out-of-work benefits and reducing prolonged absence caused by deteriorating health.
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Oakley found that the move could result in a net £4.1bn financial benefit to business, the Treasury and the wider economy by increasing productivity and having fewer periods of long absence and better public health outcomes because people would not be spreading illness by coming into work sick.
Amanda Walters from the Centre for Progressive Change, which is leading the campaign, said: “Most of us try to battle on when we’re sick, but sometimes we know that going to work will only make things worse, we’ll end up sicker and less productive.
“It would be a massive missed opportunity not to address the rate of statutory sick pay now. The government should ensure no worker risks their health for want of a decent sick pay system.”
Under current plans a full-time worker on the average UK salary would still lose £419 net in the first week of illness, even with day-one sick pay rights, putting them below the minimum acceptable standard of living, according to University of Loughborough research.
Starmer told the TUC conference in 2021 – when sick pay stood at £95.85 a week – that a Labour government would not only guarantee all workers received it, but increase the level at which it was paid.
He said: “We have one of the lowest rates of sick pay in Europe. It’s not good enough. So as well as guaranteeing sick pay, Labour’s new deal will increase it as well.”