David Cameron is examining the feasibility of making workers pay into flexible saving accounts in order to fund their own sick pay or unemployment benefits, probably through an opt-out on some of EU employment law as part of the referendum negotiations. Secretary of State for Work and Pensions Iain Duncan Smith, the first to float the idea, suggests the Government takes steps towards a form of unemployment insurance, such as those in use in the USA, or the “fortune accounts” used in Singapore.

The concept of “fortune accounts” was explored by the Adam Smith Institute think-tank in 1995, which deemed it a plausible idea for the reason “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 anyone unable to pay adequately into their account, the State would “pay that person’s fortune account provider to ensure that the right level of cash benefits or care services are provided… It will simply top up the contributions”

That Cameron is open to the possibility has sparked alarm from the Labour Party, who fear that it would be the first move towards the privatisation of the welfare system and aspects of the health system. Emma Lewell-Buck, a Labour member of the Commons work and pensions committee, argued, “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.” However, Duncan Smith insists there are as yet no firm decisions and it is just “an idea that should be looked at”.