Ministers are facing mounting pressure to raise the basic rate of statutory sick pay (SSP) from £3 per hour for full-time workers, as concerns grow that hundreds of thousands of individuals each year lack sufficient financial support to meet essential expenses while unable to work.
The government plans to initiate a consultation on Monday, coinciding with the second reading of its employment rights bill, which aims to provide paid sick leave from the first day of illness for workers earning below the threshold of £123 weekly.
While campaigners have praised these changes, they urge the government to increase sick pay, currently set at £116 a week and linked to inflation, arguing that the inadequate amount contributes to pushing vulnerable individuals into poverty.
In a letter to Keir Starmer, various charities, including Citizens Advice, Macmillan Cancer Support, Mind, and Maggie’s, have urged the government to modify the bill to allow for an increase in sick pay, particularly in light of the declining health among working-age individuals.
They noted, “Hundreds of thousands of working people diagnosed each year with infectious diseases, cancer, mental health issues, or serious injuries will continue to lack adequate financial support for essential bills such as food, rent, and heating.”
They cited extensive evidence, including medical, academic, and insights from leading UK think tanks and charities, indicating that the current SSP system adversely impacts workers and ultimately detracts from employers’ and the government’s interests.
“This situation threatens to undermine the government’s commendable goal of fostering economic growth and supporting our NHS,” they wrote.
This commentary follows a report from WPI Economics, led by welfare reform expert Matthew Oakley, which suggested that an increase in the sick pay rate could reduce absenteeism by preventing ill workers from slipping into out-of-work benefits and minimizing prolonged illnesses stemming from deteriorating health.
Oakley’s findings indicate that raising sick pay could yield a net financial benefit of £4.1 billion for businesses, the Treasury, and the broader economy by enhancing productivity, decreasing long-term absences, and improving public health outcomes, as workers would be less likely to spread illnesses by coming to work unwell.
Amanda Walters from the Centre for Progressive Change, which is spearheading the campaign, stated: “Many of us push through illness, but we know that working while sick can lead to worse outcomes, making us less productive.”
She emphasized, “Failing to address the statutory sick pay rate now would be a significant missed opportunity. The government should guarantee that no worker compromises their health due to insufficient sick pay.”
According to current proposals, a full-time worker on the average UK salary would still face a net loss of £419 during their first week of illness, even with the introduction of day-one sick pay rights, which would place them below the minimum acceptable standard of living, as highlighted by research from the University of Loughborough.
Starmer had previously stated at the TUC conference in 2021, when sick pay was capped at £95.85 a week, that a Labour government would not only ensure that all workers receive sick pay but would also enhance the payment level. He remarked, “Our sick pay rates are among the lowest in Europe. This is unacceptable. Therefore, alongside the guarantee of sick pay, Labour’s new deal will also increase the amount paid.”
