Coronavirus: Job-Support Schemes

Owen Thompson Excerpts

Tuesday 7th July 2020 Commons Chamber

[Owen Thompson (Midlothian) (SNP)]

A few months ago, the Chancellor spoke directly to those who had lost their livelihoods overnight. He said:

“To all those at home right now, anxious about the days ahead, I say this: you will not face this alone.”

Those were reassuring words, and they were backed up by a Government promise to do “whatever it takes” to keep the people of these isles healthy and financially secure. I heard no caveat at that time that included, “unless you are director of your own company”, “unless you are a freelancer” or “unless you are a contractor”.

The warm words do not ring true for those still struggling to keep their head above water. The Trussell Trust reported a staggering 89% rise in the need for emergency food parcels in April, so “whatever it takes” is clearly a lot more than what is being provided. It is not just a few on the periphery of the Chancellor’s vision who are missing out on this vital support. There is a roll call of people who have been forgotten that it would take a pair of blinkers to avoid seeing. Excluded UK estimates that around 3 million are missing out—some 10% of the workforce. Every constituency across the UK will have its own heartbreaking examples of hard-working people who somehow did not qualify for the schemes. These are individuals whose lives have been devastated. They are being let down by a Government who are not meeting their commitment to them. They include the newly self-employed, some of whom left good jobs over a year ago to invest and build their own businesses, but whose income collapsed when covid-19 took root; small limited companies that pay themselves partly through dividends; and freelancers who work multiple jobs.

When someone’s income is the wrong mix of self-employment or short PAYE contracts, neither scheme will help and the computer simply says no. That is the fate of many freelancers in the creative sector, which is so crucial to the economy around the Lothians. Those people do not always make a lot for themselves, but they contribute massively to the communities, our culture and the wider economy.

At the time of the launch of the self-employment income support scheme, the Chancellor said that 95% of those who were majority self-employed would be covered, and that most of those who would not be covered were high earners, but the evidence from countless cases suggests that simply is not the case. There are employees struggling who are not included in the furlough schemes because they picked the wrong time to change their jobs and seasonal workers whose bosses simply did not get the paperwork done in time. UKHospitality told the Treasury Committee that somewhere between 350,000 and 500,000 people in that sector were potentially missing out because they had not had their first payslip before the end of March.

There is growing unease among those who were furloughed that support will start to be tapered before they can build some earnings again and that their job will be on the line, too. We cannot simply shrug our shoulders and say “Too bad, mate”, to all those issues, blaming the complexities of the rules and saying that there are some who may try to bend them. Yes, there are challenges to making the system work, but in an emergency such as this it is the role of Government to put the people first. There is no excuse for missing anyone out.

Now is the time to finesse, improve and extend support for small and medium-sized businesses and freelancers, who will be more than willing to repay the Government’s efforts in their taxes over future years. Withdrawing support at a crucial time would be an economic disaster.

Fairness and equal treatment should be at the heart of action from HMRC, which is why I must mention my great disappointment that the Government refused to review the unfair application of the loan charge and to stop the IR35 tax law changes from pressing ahead. IR35 introduces yet another group of zero-hours employees. The Chancellor has listened to many of these concerns, and I know he has taken steps to resolve some of the issues in the past. I commend him for those efforts, but I urge him not only to keep listening, but to take action.