Support for Self-employed and Freelance Workers

Jim Shannon Excerpts

Thursday 17th September 2020 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move,

That this House has considered support for the self-employed and freelance workers during the covid-19 outbreak.

I am grateful to the Backbench Business Committee for granting time for this important debate, which affects so many of our constituents. The job retention and self-employment income support schemes have provided a lifeline for many, and they have undoubtedly provided a degree of security for those who were eligible. But there’s the rub: far too many people have been ruled ineligible.

Today’s debate takes place just as the six-month period that the self-employment scheme was intended to cover draws to a close. I intend to make the case that the scheme should be continued where it is needed and, crucially, that it should be extended and backdated for all those people who have been unfairly left without support over the last six months through absolutely no fault of their own, and who have endured intense hardship as a result.

Many cannot pay their bills. They are losing their homes, they are drowning in debt and they need our support. Today’s debate is a sorely needed opportunity to set out how the self-employment scheme has fallen short. It has fallen short by failing to recognise the reality of what self-employment looks like in Britain today—by failing to understand that self-employment is significant across the breadth and depth of our economy. The self-employed are beauticians and barristers; charity and construction workers; dentists and decorators; many in marketing, events, arts and hospitality, and many more. This is a chance for us to explain loudly and clearly why self-employed people need justice and why they need support as we go forward.

As it stands, as I am sure all hon. Members know—although, frankly, I am less sure that Treasury Ministers know—the Government scheme penalises a wide range of people. They include those who combine self-employment with pay-as-you-earn work, or PAYE freelancers. They include new start-ups and the recently self-employed. They include women who have taken time out for maternity leave and childcare. They include anyone earning over £50,000. They include those earning less than 50% of their income from self-employment. They include limited company directors who take their income in the form of dividends.

There have been endless requests for the Treasury to meet MPs and those affected by the scheme’s failings to discuss those gaps. Frankly, the exchange between the Chancellor and the hon. Member for Batley and Spen (Tracy Brabin) during Treasury oral questions earlier this week underscored how urgently such a meeting is needed. I am not sure whether the Chancellor just does not understand his own scheme or whether he was deliberately being economical with the truth, but when he asserted that the only group of people excluded from the self-employment scheme is those earning more than £50,000, and that their average median salary is apparently £200,000, I did not know whether to laugh or cry. He is completely and utterly wrong. He does not understand his own policy, and we urge him again to meet us so that we can set out the problem.

At this point, I would like to pay tribute to the brilliant campaigns, including ExcludedUK, ForgottenPAYE, ForgottenLtd and many others, and individuals such as Amanda Evans and Ellie Phillips who have helped the self-employed find such a powerful and united voice. I also thank the various hon. Members from right across the House who joined me, campaigners and the money saving expert Martin Lewis at the end of July to symbolically deliver petitions to the Treasury. They were signed by more than 348,000 people and demanded that the gaps in the scheme be urgently closed.

Those campaigns and many individuals have sent copious correspondence to the Chancellor, detailing the various groups of people who are not eligible for income support. His refusal to honestly engage with those suffering as a result of his policies is frankly shameful. The Treasury has met all requests for dialogue with either deafening silence or meaningless stock responses. I am sorry, but that is not good enough.

It is not good enough for my Brighton constituent who was working full time with the BBC as a PAYE freelancer, so he is ineligible for either furlough or self-employment support and, having come relatively recently from Ireland especially to take on the role at the BBC, he is not eligible for universal credit either. He says that how he has been treated during this crisis has financially ruined him. It is not good enough for Deniz Turan, a sole trader who has gone, in her own words, from being a successful businesswoman to being homeless and feeling suicidal every day in the blink of an eye, simply because she was a start-up who took her income in dividend payments. And it is not good enough for Mark, another small limited company director, who says that the strain of getting no income support on his marriage, his household, his mental health, his physical health and his finances is literally unbearable.

The self-employed have been failed by the Chancellor and the Prime Minister, and it is not just me making that argument. As hon. Members will know, an all-party parliamentary group has recently been formed. I pay tribute to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) for setting up the APPG, which represents those who have not been protected by the various Government packages. It is I think one of the fastest growing APPGs in parliamentary history. It currently has around 260 MPs from all sides of the House, including 79 from the Government Benches, while 15 Conservative MPs added their names to the application for this debate to take place.

[Jim Shannon (Strangford) (DUP)]

One of the forgotten sectors is music teachers who teach our young people. Many of them—including some in my constituency, as well as throughout the United Kingdom of Great Britain and Northern Ireland—do not have any income whatever. They are one of the forgotten groups as well.

--- Later in debate ---

[Claire Hanna (Belfast South) (SDLP)]

I thank those Members who have been championing the self-employed for the past six months. In Northern Ireland, about 15% of people are self-employed, which is higher than average, and of course the scheme has been welcome, vital and suitable for many people, including those back already to something approaching a normal working life. For me, however, as for other Members, the hole in the scheme became very clear from my inbox—from the newly self-employed without last year’s tax return, to the limited director who pays herself with dividends as and when she can; from the PAYE freelancer, the part-time freelance, to those just over the threshold or who took time off for sickness or maternity, having tried to build a career that could balance their home and work life, and now feel abandoned.

In short, the scheme did not reflect the modern economy and modern work practices, nor the ways in which so many had been living. These are individuals who had taken a leap of faith with their skills or had been manoeuvred into their working arrangements by the casualisation of the economy in their sector. We are talking about the tradesman, the contractor, the small and growing business—the red blood cell members of our economy, driven, willing and creative: attributes we will need so much as we rebuild after the pandemic. Some have already gone under because they could not wait for business as normal to return, and very many more are edging closer to a similar fate. In my constituency, since the start of the pandemic, 2,300 more people are claiming universal credit. It would take every minute of the time we have today to talk about how unfit for purpose and unfair is that system that so many more people will be thrown into in coming months.

I want to use my limited time to focus on the creative sector in Northern Ireland, which is 5% of our economy and growing fast. It is not only fundamental to our tourism product but fundamental, of course, to who we are. At home, now and in darker times, the arts was the shared space—the organic place—where people of all backgrounds and different views worked and enjoyed themselves together in a way that a Government in Northern Ireland could not create in their wildest dreams. It was, as Liam Neeson said, our north star and our compass. He said that at the Lyric theatre, which is the heart of my constituency and the heart of the arts and culture.

[Jim Shannon]

The hon. Lady is very passionate in what she is saying, and I totally agree with her. One of the drama clubs and theatres that has done exceptionally well is Bangor drama club, which has closed after 90 years. Many of my constituents participated in that for the camaraderie, the coming together, the friendships and the wonderful productions. Does she agree that the Minister here and the Minister in Northern Ireland must ensure that historic venues such as this can be opened once more as the community hubs that they are and can be again?

--- Later in debate ---

[Fiona Bruce (Congleton) (Con)]

It is a pleasure to support freelancers and self-employed people in my constituency who have fallen through the cracks of what I recognise has otherwise been an extremely generous financial package provided by the Treasury for so many people. As I have gone about my constituency over the past few months, so many people have thanked me—people in business and employees—for the support that they have received from the Chancellor. However, I want to use this opportunity to highlight three cases in my constituency.

The first is that of Andy Warren, a co-director of the long-established Congleton company Printing Group (UK) Ltd. He refers to the fact that dividend-receiving company owner-managers are effectively discriminated against from receiving support. He says:

“HMRC is happy to accept our word on our income tax returns (that are self-assessed), on our corporation tax returns (that are self-assessed), on the furlough claims we make for our staff, and on our entitlement to a bounce-back loan. We even have to self-declare that we have to repay child benefit. None of these are verified by a third-party, we are taken at our word. So why is it not acceptable regarding our dividends?”

Secondly, I would like to turn to the concerns expressed by another constituent, Dave Boutcher, who is a director of Thorn Distribution Ltd, a warehousing and distribution company with 15 staff. Neither he nor his co-director have received anything by way of benefit from any national scheme or council support package for themselves or their company. They have not even received any furlough money, due to a technicality on the payroll submission date, but being the honourable employers that they are, they have paid out some £100,000 of their own money to their staff, effectively furloughing their staff out of their own funds. I wrote to the Treasury about this on 13 May and received a generic reply letter on 8 September. I am asking the Treasury to look again at their case, which their accountant says is one of the worst they have seen in a system with no flexibility and no appeal.

Finally, I would like to talk about my constituent Lauren Scott, a self-employed musician. We have heard a lot about musicians in the debate, and I would like to tell the House about Lauren’s circumstances. Lauren is a highly professional harpist, and her husband Andy is a composer and teacher. Over the past 10 years of my being a Member of Parliament, no individuals have done more in my constituency to promote the arts, and particularly the engagement of young people in music, than Andy and Lauren Scott. I have heard Lauren perform many times as a harpist, and I have heard one of Andy’s pieces premiered at the Southbank Centre.

[Jim Shannon]

I commend the hon. Lady for what she has said. It is so important to foster talent, and if we do not provide the support now, that future talent could be lost forever.

[Fiona Bruce]

The hon. Member is absolutely right—it is about not just these people’s talent, but the next generation that they are nurturing.

Lauren says:

“I am a self-employed freelance musician of 25+ years. I have only ever been a professional musician. During that time I have always paid my taxes and never considered myself to be a burden on the state. I am highly regarded within my field and very often my work is booked into my diary up to 1-2 years in advance. All my concert work has been cancelled…Performing was 80% of my work/income and private teaching was 20%. The only work I now have is my teaching.

At the start of lock-down I applied for 18 jobs with local supermarkets for roles ranging from shelf stacking to driving delivery vans. I did not succeed with any of those applications. It appears that 25 years of playing guest principal harp with all the professional orchestras playing at the likes of the BBC Proms, recording live broadcasts and performing at all the major concerts venues across the country was not the right kind of experience Aldi and Tesco were after.

I will not be able to ‘get back to work’ when the current SEISS ends in October. By now my diary should be full of bookings for 2021, but promoters are not booking and I have nothing booked in for next year…

Please could you ask for there to be consideration to extend the SEISS for self-employed musicians and the Arts Sector. Having high quality live events happening in major venues… is precisely what is going to attract people to visit those city centres.”