Covid-19 Support Schemes: Ineligible People

Debate between Christina Rees and Munira Wilson

Wednesday 9th December 2020 Westminster Hall

[Munira Wilson (Twickenham) (LD)]

I beg to move,

That this House has considered support for people ineligible for Government covid-19 support schemes.

It is a pleasure to serve under your chairmanship, Ms Rees.

“Feelings of betrayal, hopelessness, abandonment and not belonging have caused me immense anguish over the last 9 months”.

Those are the words of Lisa from London, who spent 34 years as a pay-as-you-earn taxpayer and was newly self-employed in April 2019.

I am incredibly grateful, as are the many thousands of people who have been in touch—both directly and indirectly—to share their stories with me, to have been granted this very important debate, which also addresses three petitions. I am aware that many Members were unable to make the crowded call list today.

It is 261 days since the furlough scheme was announced and 258 days since the self-employment income support scheme was announced, yet those very welcome schemes had gaping holes in them. We know that some 3 million people—approximately one in 10 of the workforce—fell through those gaps. Often, they were ineligible for universal credit, so they were left without a penny of Government support over the past nine months. Their plight has been raised time and again in this place, and the largest all-party parliamentary group has been formed to champion their cause. Yet the Treasury has repeatedly refused to do anything to address this glaring injustice.

Those who have been excluded span many different categories of workers, including, but not limited to, employees who were denied furlough or were ineligible for it, which includes new starters; the self-employed, including those newly self-employed; those over the £50,000 threshold; those who earn less than 50% of their income from self-employment; directors of limited companies who are paid annually or via dividends, or directors of such companies that are not yet in profit; PAYE freelancers; those on zero-hours contracts; and new mothers. These 3 million individuals are from all walks of life, from beauticians to builders, teachers, driving instructors, taxi drivers, lawyers, those working in our world-leading creative industries, and many, many more.

I will address up front some of the misrepresentations that exist, then touch on the impact of this injustice and, importantly, refer to some of the solutions that have been proposed. To date, the responses that we have had from the Government include, “It is too difficult and complex to include these groups.” I am afraid that, nine months on, that just does not wash. I understand that the schemes were set up at speed, but there has been ample time to work through and implement solutions. Another response was that the schemes were targeted where help was most needed. It is clear from the thousands of case studies received and the surveys conducted by the House of Commons digital engagement team, the Organise group and ExcludedUK that that is simply not true. There are heartbreaking stories of desperate need, including the use of food banks and people not being able to switch the heating on this winter.

There has, at times, been a suggestion that some of the excluded are highly paid and dodging tax in some way, especially those paid via dividends. My constituent, Fraser Wilkin, who runs a travel company in Twickenham, pays himself by dividends because of the huge fluctuation in annual income due to events outside his control, such as the coronavirus. If he had drawn a regular salary through the year, he would have been unable to fulfil his statutory and contractual obligations to his clients, in terms of prompt refunds when their holidays were cancelled due to the pandemic.

Universal credit is cited as the fall-back. A survey of more than 3,000 individuals found that almost three quarters were unable to access universal credit. Let us face it: we all know that universal credit is not meaningful support. Otherwise, the Government would not have felt the need to create the furlough scheme or the self-employed income support scheme.

We know that the mental health impacts on many of those excluded from support have been stark. There have already been eight reported suicides, and one respondent to the House of Commons digital engagement team said that she almost took her life several times, and one week spent every day in contact with the Samaritans.

The Centre for Mental Health has said that covid-related unemployment has caused an additional almost 30,000 people to request services for depression. Those mental health impacts spread well beyond the 3 million individuals to their families and support networks. Many report having to move back in with elderly parents and rely on their pensions. Marriages and relationships have been strained or ended. Parents of young children talk about the stress it is putting on their children. An anonymous respondent from the north-west said:

“my mental health has plummeted and my family are anxious too, so much so my teenage daughter is getting counselling for her anxiety”.

Personal debt is rising. Rachel from the south-east says:

“I am selling my house, cannot get a mortgage, selling my personal belongings just to put food on the table. Getting into so much debt. Never been so scared in my life. I’m also a single parent and it’s heart-breaking telling my daughter that Santa can’t afford much this year”.

In terms of the wider economic impact, those businesses and entrepreneurs, who are natural risk-takers, are the wealth creators and the lifeblood of our economy. Retaining their skills and health, and stopping their businesses going to the wall are critical to our post-covid economic recovery. It is incredibly short-sighted to cast them aside in this way.

Moving on to solutions, many proposals have been put forward by a number of groups, such as the Association of Independent Professionals and the Self-Employed, the Treasury Committee, the Federation of Small Businesses, the gaps in support all-party parliamentary group and the various representative groups for those who have been excluded.

I have limited time today, but some of the solutions include using HMRC data to support claims for those with PAYE income history; widening the accepted evidence for demonstrating proof of employment; extending cut-off dates; looking at the two specific schemes that have been put forward for directors of limited companies; removing the 50% rule; removing bereavement payouts and carers’ allowance from the calculation of PAYE income; and extending the criteria for discretionary business grants. Many of those solutions just require imagination and will. Plenty of experts stand by to help make them implementable.

I want to conclude by sharing from a children’s book sent to me by Kev Payne, who was a teacher and became an illustrator in 2018. He is ineligible for support because of the 50% rule. He wrote a story to try to explain how he feels. In it, the mice are the taxpaying workers and the bear is the Government. A storm hits and the bear provides food and shelter for all the animals, but the mice are left out and told that there is no space for them:

“‘But I gave you my food’, said Mouse. ‘You said you would help me.’

‘I cannot help you now,’ said Bear. ‘I will see you when the storm is over.’

‘But…’ began Mouse. Bear glared and growled at Mouse. It turned its vast back against her.”

My plea to the Minister is to listen to how these hard-working, tax-paying people are feeling and to look at the long-term impact of his policy. The Chancellor does not have to be the big, bad bear; he can be Santa Claus this Christmas.

[Christina Rees (in the Chair)]

I will start the winding-up speeches at 5.10 pm. There are lots of Members who want to speak, so I am afraid we will have to have a time limit of two minutes.