Coronavirus Bill

Viscount Colville of Culross Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 24th March 2020 Lords Chamber

[Viscount Colville of Culross (CB)]

My Lords, I declare an interest as a freelance television producer.

I very much appreciate the extraordinary work that the Government and especially the Chancellor have already carried out to mitigate the effects of the present crisis on the economy and the nation’s workers. However, as other noble Lords have said, we are in an unprecedented situation, with bankruptcy and unemployment sweeping through our nation. I want to concentrate my comments on Clauses 39 to 44, which extend statutory sick pay.

Quite rightly, the Government’s efforts so far have concentrated on the job retention scheme, supporting businesses and employees to ensure that there is an economy to build on when these terrible times are over. However, my concern is for the 5 million self-employed and freelance workers, many of whom have had their contracts cancelled with only a week’s notice—if that. They have been sent home to worry about paying ongoing bills without any prospect of returning to work in the foreseeable future.

This group of freelancers and self-employed people is far-ranging. It includes 37% of people in the creative industries, who are highly skilled and highly paid and work in what is one of the fastest-growing areas of the economy. It also includes sole traders, such as plumbers, electricians and agricultural workers, as well as an increasing number of supply teachers and agency social care workers. I am also concerned about zero-hours workers who are independent contractors and are often semi-detached from companies. Many claim that they should be defined as employees and entitled to the same rights as employees, including having access to the job retention compensation scheme.

I have been told about a number of cases involving these workers. One is a cycle instructor teaching Bikeability classes in London schools. He is defined as a self-employed worker on a zero-hours contract; in reality, he does public sector work without any of the protections of a public sector employee. Normally, March to July is his busiest time, earning him up to £2,000 a month. With the schools closing, all his work has dried up. A 24-hour cancellation policy has left him with no work and no prospect of work. At the moment, he is not part of the job retention scheme and faces a very uncertain future.

I understand that supporting these people is very complicated. When I asked a question on this subject on Thursday, the noble Lord, Lord Callanan, explained that the Government were looking for a comprehensive package which was co-ordinated and coherent and would take time to roll out. Of course, I very much welcome the Chancellor going some way to help the self-employed by rolling out universal credit, allowing self-assessed tax payments to be postponed until January 2021, and encouraging interruption loans.

However, universal credit pays only £94 a week and even less if people have been prudent enough to save a nest egg. As has often been said in this House, UC takes five weeks to roll out. The tax holiday and interruption loans are also helpful but, in the end, they simply kick the problem down the road and the debt still has to be paid. We have no idea how long this crisis period will continue and, in the meantime, these hard-working people from across the country and across society face mounting debts and a very frightening future.

I know that the Government are looking at what is happening abroad and talking to stakeholders about how to support the self-employed through the crisis. Norway is paying self-employed workers grants equivalent to 80% of their average income over the past three years. Belgium’s self-employed workers will have access to an income replacement scheme.

I would like to draw the Minister’s attention to an idea supported by many across the self-employed sector, which, at the very least, would go some way to compensating for lost wages. I would like to see the Government extend their job retention scheme and pay 80% of expected earnings up to the cap of the median wage. Rolling this out will be difficult but the Government could use the person’s last three years’ tax returns to decide how much support they should be paid within this limit. It is estimated that four-fifths of the self-employed and freelancers earn less than the median wage and so would benefit hugely. Maybe the resulting grants could be made through the payment on account scheme, as is used at present for tax rebates. I quite understand that new software would need to be rolled out at HMRC to administer this system. That is often expensive and not entirely successful. Perhaps the DWP and other departments could help out.

At this time of unprecedented worry for every single person in this nation, we must think about the millions of workers who are the backbone of this country, who have lost their livelihoods—workers who are now sitting at home worrying about how they are going to get through the coming months without incurring huge debts, which could take years to pay back. Action is needed now to ensure that they do not sink into destitution and despair.