Coronavirus Bill

Viscount Colville of Culross Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Wednesday 25th March 2020 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, my right honourable friend Ed Davey prompted an important statement from the Chief Secretary to the Treasury yesterday. In doing so, he acknowledged the way the Chancellor and the Treasury have given support to businesses and employees so far, but emphasised that this will remain incomplete and inadequate until we see proper measures for the 5 million self-employed across the country who are excluded from current financial support for businesses and employees.

That is the motive behind this amendment, which seeks to replicate the Government’s support scheme for those in employment, both in the 80% of gross monthly earnings and in reference to their average earnings over the past three years, with a cap of £2,500. As my old friend Munira Wilson said when introducing a similar amendment in the Commons,

“5 million self-employed and freelancers feel that they have been completely overlooked.”—[Official Report, Commons, 23/3/20; col. 145.]

They are under real stress as a result of the coronavirus crisis. Freelancers and the self-employed are deeply worried, and the rather confused messages coming out of government about when they should go to work do not help.

In his response to my right honourable friend Ed Davey’s Question, the Chief Secretary to the Treasury, Stephen Barclay, used the phrase “further help is coming”. But while we all understand that there are complications, the Government must move as fast as possible to meet these people’s concerns, because in many cases they are simply running out of money. As my right honourable friend said,

“80% of the 5 million self-employed are sole traders. They are our neighbours, our friends, our family. The vast majority are not wealthy people. They are cleaners, taxi drivers, plumbers, hairdressers; they are musicians, tutors, journalists; and they are builders, electricians and child minders.”—[Official Report, Commons, 24/3/20; col. 208.]

Most of the self-employed have very modest incomes and are not well off. The majority have taxable incomes of less than £10,000 a year, compared with just 15% of employees on incomes that low. Without help, they will not be able to pay their mortgages, rent and bills, and will face financial ruin.

As the Minister may know, I have a particularly strong connection with the creative sector. Freelance work and self-employment is the predominant pattern in the sector. For instance, 73% of those working in the music industry are freelance. A Creative Industries Federation survey last week revealed that 60% of creative freelancers estimate that their income will more than halve in 2020 due to the coronavirus outbreak and that almost 50% of freelancers who responded to the poll had already had 100% of their work cancelled. They, along with 50 creative bodies, Equity, the MU and the Writers’ Guild, have called for an emergency fund that gives a time-limited and carefully targeted cash grant to the self-employed workers and freelancers who need it most.

Other European countries have put in place similar schemes; Norway, for example, has guaranteed temporary income protection for 80% of average self-employed earnings from the past three years, with an annual cap of the equivalent of £45,000. So have France, Belgium and Denmark. An urgent package of help is needed now, which needs to be at least the equivalent of that which has been offered to employees. As I said yesterday in relation to journalists, but it applies across the board for the self-employed and freelancers, they may be forced to ignore government guidance to stay home and plough on with what work is available or face real hardship.

In closing, I was surprised, when I asked the Labour Front Bench to support and sign this amendment yesterday, to be told that it was not a priority in light of the time available for discussion on the Bill. I am glad that they have now changed their tune, especially given the helpful statements of the Mayor of London and John McDonnell yesterday. I urge the Government to be generous and conscious of the necessary urgency in their response. I beg to move.

[Viscount Colville of Culross (CB)]

My Lords, I put my name to this amendment, because I too am about the need for economic support for the self-employed, freelancers and workers on zero-hour contracts. Yesterday, the noble Earl, Lord Courtown, told the House that compensation for these people must be part of a package that is comprehensive, co-ordinated and coherent. However, he was not prepared to put a timetable to that announcement.

As the noble Lord, Lord Clement-Jones, just said, this amendment will give support straightaway to the 5 million self-employed workers, four-fifths of whom fall below the £2,500 a month threshold suggested in subsection (4)(b) of the proposed new clause, which is about the medium wage. It would be in line with the job retention package for employees announced last Friday.

However, I cannot emphasise enough that the scheme needs to be enacted very quickly. Failure to do so is threatening the lives of workers and those they serve. The great fear is that many self-employed workers have to decide between self-isolating and having no money coming into the house. That is particularly so in the care sector. I talked to a support worker on a zero-hours contract at a private residential home in Somerset run by a charitable trust. At best, she works two 15-hour night shifts a week for minimum wage. Together with her husband’s state pension, it is hardly enough to cover her rent and food bills as it is. Her husband is in bad health and vulnerable to the virus. Eventually, after some soul-searching, she decided that in the present crisis she could not threaten his health by continuing to go to work and has gone into self-isolation.

That support worker has done the right thing, even though she will now start running up debts that could take a long time to pay off. But this is a very real dilemma for many lowly paid self-employed people and workers on zero-hours contracts. There are real fears in the care industry that some workers who look after some of the most vulnerable people in this country will ignore any symptoms of the virus and continue going to work because they cannot afford not to. As a country, we cannot take that risk. I urge the Minister to accept the amendment. If he is not prepared to do so, at least will he tell the House when the Chancellor will come forward with a package of help for the self-employed, freelancers and workers on zero-hours contracts? Time is of the essence.

[Lord Adonis]

My Lords, the proposals that the noble Lord, Lord Clement-Jones, has put forward commend themselves to the House. Essentially, he proposes that the Danish system be introduced here. The Resolution Foundation published a paper this morning that applies considerable expertise and global knowledge to this issue and proposes something similar.

I slightly regretted that the noble Lord made party-political points towards the end, because I do not believe that there is any party-political difference on this at all. We are all looking to the Government—indeed, many Conservatives take the same view. I hope that we can address all these things as a House together and not make party points on them.

However, my concern about this amendment is exactly the same as on the previous one. What we are talking about here is one of the most important decisions that the Government will take in dealing with this crisis. The noble Viscount was completely right about the social impact; 5 million gig workers in the economy, all of whom are self-employed but have been dependent on income from services that have been reasonably predictable in their provision, face their livelihoods being decimated at the moment. Unless provisions of this kind are put in place, they will face serious hardship. Unless a Statement is made today by the Chancellor, Parliament will not have the slightest impact on what is proposed, because we will have no opportunity to question Ministers about it—neither the Chancellor in the other place or Ministers in this place—and we will not get to give any views on this issue again until, I understand, 21 April.

That is not satisfactory. These issues are costing billions of pounds to the taxpayer and will have a huge social impact, but Parliament will be entirely irrelevant to the discussion and the announcement of those proposals. I therefore hope that the noble Earl can give us some indication of how Parliament will be involved in both the announcement and the assessment of the package in respect of the self-employed when it is made. It is not satisfactory that we will play no part in this for another month.