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Cameron considers plan to have workers fund sick pay

File image of British Prime Minister David Cameron (AFP photo)

David Cameron is considering new plans to make workers save their own money to fund their sick pay, Downing Street has confirmed.

The controversial idea, first suggested by the Work and Pensions Secretary Iain Duncan Smith, is an attempt to replicate the US unemployment insurance scheme, which encourages workers to use personal accounts to save up money for unemployment or illnesses.

 “We need to support the kind of products that allow people through their lives to dip in and out when they need the money for sickness or care or unemployment,” Duncan Smith said. 

“We need to encourage people to save from day one but they need to know that they can get some of the money out when their circumstances change. This is not government policy but I am very keen to look at it, as a long-term way forward for the 21st century.”

The official spokeswoman for the Cameron confirmed the prime minister’s interest in considering the scheme.

 “I think the PM shares the work and pensions secretary’s view that we should be doing more to encourage people to take personal responsibility for how they manage their affairs,” she said.

“This isn’t government policy, it’s an idea that’s out there. It’s an idea that should be looked at. That’s where it’s at, at the moment.”

Despite having no concrete plans to explore the idea, the new Conservative suggestion is expected to cause concern in the Labour Party which is already fighting against privatisation and austerity by the government.

Emma Lewell-Buck, a Labour member of the Commons work and pensions committee, said it was “the latest signal that the Tories are determined to dismantle what is left of our country’s safety net”.

She added: “People don’t choose when to fall ill, and the right to sick pay guarantees people financial security if they are unlucky enough to be too ill to work. Under the scheme the Tories are proposing, that security would disappear.”

“David Cameron and Iain Duncan Smith can cope just fine without sick pay but, for millions of British people, it provides essential support and peace of mind. As always, it’s the most disadvantaged who are in the firing line under the Tories,” said Lewell-Buck.

Sources close to Duncan Smith said it was early days for the proposal and no concrete work had been done on it by the Department for Work and Pensions but it was something the secretary of state would like to see explored.

The proposal of fortune accounts for the UK was examined in depth in a paper by the free market libertarian Adam Smith Institute think-tank in 1995, which looked at how people could go to a single private provider for an account that gave them long-term care insurance, disability cover, health insurance, savings fund management and unemployment insurance.

This paper suggested: “Many other things that we often regard as ‘welfare’ today are also insurable and will be part of the fortune account package. Cover against incapacity to work, long-term care services, and disability, will all be in the package.

“For those who are never able to work through disability or other problems, the state will step in. As a welfare function, the government will simply pay that person’s fortune account provider to ensure that the right level of cash benefits or care services are provided...For those in low-paid work who are unable to make adequate payments into their fortune account, the state will step in. It will simply top up the contributions of those people as a welfare obligation,” it added.


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