Coronavirus Bill

Lord Clement-Jones Excerpts

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

Moved by

[Lord Clement-Jones]

5: After Clause 84, insert the following new Clause—
“Statutory self-employment pay(1) The Secretary of State must, by regulations made by statutory instrument, introduce a scheme of statutory self-employment pay for those whose work has been impacted as a result of the coronavirus.(2) The scheme must make provision for payments to be made out of public funds to individuals who are—(a) self-employed, or(b) freelancers.(3) Regulations made under subsection (1) may define the meanings of “self-employed” and “freelancers” in subsection (2).(4) The payments to be made under subsection (2) are to be set such that the gross monthly earnings of an individual specified in subsection (2) do not fall below—(a) 80 per cent of their gross monthly earnings, averaged over the previous 3 years (or if records do not date back 3 years, the monthly net earnings averaged for the period records are available), or(b) £2,500,whichever is lower.(5) No payment made under subsection (2) shall exceed £2,500 per month.(6) Regulations made under subsection (1) may provide that payments made under subsection (2) must be paid back via self-assessment if the payments were made in error.(7) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”Member’s explanatory statement
This amendment would ensure that the Government introduced a scheme of statutory self-employment pay.

[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.

--- Later in debate ---

[Earl Howe]

My Lords, as the noble Baroness knows, there are various avenues for individuals to utilise. One might be contacting their local Citizens Advice to enable it to make representations. They can contact their Member of Parliament to enable him or her to make representations on their behalf. They are not without the means to communicate if something does not work as it should.

[Lord Clement-Jones]

My Lords, this has been an extremely valuable debate. All sides of the House have demonstrated how important support for freelancers and the self-employed is. The Minister will know that he commands quite a lot of confidence in this House, so we take him at his word when he gives us an assurance, as he has, that the Chancellor of the Exchequer is determined to bring in a scheme that is workable and for precisely this cohort of people—5 million freelance and self-employed people. He has given an important assurance because, as the noble Lord, Lord Adonis, pointed out, we will not have the ability to question Ministers and Members in the Commons will not have the ability to question the Chancellor on the nature of any scheme. In a sense, we have it on trust that something will be done in the coming days. As the noble Viscount, Lord Colville, said, time is of the essence; indeed, “urgent” has been used across the House.

The noble Lord, Lord Adonis, also referred to the Resolution Foundation. Torsten Bell’s interview on the “Today” programme this morning set out a clearly workable scheme along the lines that Norway, Denmark and so on have already introduced, so is it any wonder that there is frustration across at the House with the speed at which the Government are acting in this area? I take entirely the Minister’s point that the nature and scale of what has been done so far is quite extraordinary —one is not trying to minimise that—but this is the next step that must be taken extremely quickly.

The noble Baroness, Lady Thornton, pointed out the issue of eviction and other noble Lords have pointed out problems with universal credit, not least concerning means testing, capital assets and so on. None of those mechanisms will fit the bill for freelancers and the self-employed so I urge the Government to move on this with all speed, otherwise they will let down a significant proportion of our working population. I beg leave to withdraw the amendment.

Amendment 5 withdrawn.