Budget 2020: Statutory sick pay reforms don't go far enough to support workers at this critical time

The CIPD has responded to the UK Chancellor's Budget which set out emergency measures for employers and workers in response to the Coronavirus crisis

Commenting in response to today’s Budget announcement, Ben Willmott, head of public policy at the CIPD, said: 

On financial support for workers and employers affected by Coronavirus:

“The creation of a hardship fund is welcome as the CIPD have been calling for this as a way to provide economic support for workers who will struggle to make ends meet on statutory sick pay (SSP) for two weeks or who are not eligible at all. The Government needs to set clear and consistent criteria for accessing this support. It remains to be seen is how long the £500 million pledged can last. The Government must commit to reviewing the fund and be prepared to increase it if required.   

“There are nearly seven million people in the UK who fall outside SSP eligibility. Many who are eligible will struggle to survive on £94.25 a week. The government should actively consider raising the SSP level to be significantly closer to the equivalent of someone earning the National Living Wage and making it available to all, including the self-employed or within the gig economy. 

“This change would be the quickest way for people to access funds rather than spreading support for individuals across the Employment and Support Allowance (ESA) and Universal Credit which is already struggling to cope with demand and is subject to delays. 

The CIPD is also urging the Government to continue to evolve its policy response to protect people and jobs. It must consider the creation of temporary wage subsidy fund payable to employers to help organisations to minimise the need for redundancies if they have to close operations for any length of time or demand for their good or services is hit as a result of the spread of coronavirus.” 

On neonatal paid leave for parents of premature and sick babies:

“The CIPD is delighted the Government will be introducing paid leave for parents of premature and sick babies. It’s likely to make a huge difference to them when they’re facing one of the most difficult times of their lives. The new entitlement will ensure they are able to focus on the health of their new-born children and will also mean they are likely to be better prepared for their return to work, when the time comes.” 

On skills:

“We welcome confirmation of the £3bn National Skills Fund. This will go some way towards plugging the hole in lifelong learning, which is essential given our ageing workforce and the increasing use of technology in the workplace.  

“However, the Apprenticeship Levy is long overdue reform and needs to become a more flexible training levy to better suit the needs of employers.”

On the NICs threshold rise: 

“It’s good to see the threshold rising for NICs as it means people will be able to keep more of their pay packets without their entitlements being affected, like the state pension. However, given that the NIC threshold is now edging closer to the income tax threshold, it does beg the question if the two should merge to create a simpler system.

“The increase in employment allowance on National Insurance bills will be welcomed by small firms and charities, especially those who have seen their payroll costs jump due to rises in the National Living Wage.

“However, it will be important to flag to those firms, especially ones without HR support, that the allowance will now have to be claimed annually - and won’t be rolled forward as was previously the case.”  

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