Covid-19 Support Schemes: Ineligible People

Munira Wilson Excerpts

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.

--- Later in debate ---

[Munira Wilson]

I thank all right hon. and hon. Members who contributed so powerfully to the debate. We have heard so many stories and about so many sectors, many of which, such as the live events industry and the weddings industry, will be among the last to return because of the nature of coronavirus.

I gently say to the hon. Member for North East Bedfordshire (Richard Fuller) that, yes, undoubtedly some of the 3 million are high earners, but the stories we have heard today, and a lot of the surveys, show that a many of those people are struggling to get by. Believe me, I know some of the freelancers who work in the creative industries and who now live from hand to mouth. I know that the Minister and, indeed, Conservative Members, are keen to recognise what the Government have done—I am sorry if that did not come through strongly enough in my speech. I said the coronavirus job retention scheme and self-employment income support scheme are very welcome, and they have been important lifelines for millions of people, but we are asking for parity for those who have been left out.

I will pick up a couple of points of detail that the Minister gave us about the £50,000 threshold and the average for people over that threshold. If the Government are worried about that, why not look at a taper? If they were worried about people who do not necessarily need support and who are high earners, why did they not put a similar threshold in place for the furlough scheme? It is quite possible that two employees earning £100,000 got furlough payments, but somebody who earned £51,000 through self-employment got no support. How is that fair? The Treasury Committee actually pointed out that example.

The Minister also talked about people who get less than 50% of their income from self-employment—they get a minimal amount through that source. As I and others have said, they often earn through PAYE, but some of those are short-term contracts. All that data is with HMRC, and, as we have heard, it is not beyond the wit of some of the very intelligent officials to work through those solutions.

I am grateful that the Minister confirmed that he will look at some of the solutions, and I am very grateful that, finally, after months of asking, a Minister—the Financial Secretary to the Treasury—is meeting officers of the APPG and representatives of the various excluded groups. Hopefully, they will look at some of the really detailed solutions that have been put forward, beyond those that the Minister referred to. I also welcome the great campaign of the right hon. Member for Tatton (Esther McVey) on supermarkets. If some of that money can be ploughed in to fill the gaps, that would be fantastic.

If Conservative Members will not listen to Opposition Members, there are many other Conservative Members who have made the case. We heard from my hon. Friend the Member for Edinburgh West (Christine Jardine) that many affected people are Tory voters. In fact, Iain Dale said to me on LBC a few months ago, “Munira, I don’t understand; these are Tory supporters. Why isn’t this Government helping them?” I said, “I don’t know. Go and ask your friends in the Tory party.”

If the points that I made about mental health are too emotive, and if the arguments around fairness do not cut through with Ministers, they should look at what makes economic sense, as the SNP spokesperson, the hon. Member for Glenrothes (Peter Grant), said.

If the Minister will indulge me, I will return to my fantastic storybook in the 40 seconds I have left. After the storm ended and Bear recognised the talents of all the hard-working mice who were left out, he apologised to all the mice and promised that they will never be ignored again: “Mouse was so happy that she painted a special picture and when it was sold, Mouse made not one, not two, but three piles of food—one for her, one for Bear and this time a much, much bigger one for all the mice to share.”

That is an allegory about the economic benefits of helping those who have been excluded. I look forward to hearing a slightly different response the next time we come back to this debate. Hopefully, there will not be a next time—the Minister will solve it before Christmas.

Question put and agreed to.

Resolved,

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