Finance Bill (Ways and Means)

Rushanara Ali Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 19th May 2020 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Self-employment is a vital part of our economy. People who are genuinely self-employed deserve to be properly supported while ensuring that everyone pays the right amount of tax. While we welcome the extension to 2021, it is crucial that we ensure that there is levelling up and protection of people’s rights, whether they are in the public or the private sector. That is why a joined-up approach is required in bringing together consideration of tax and employment law and protection for the self- employed.

I want to turn to my wider concerns about the Finance Bill. With every passing day, it is clear that we are entering a severe recession, which is going to lead to more poverty, inequality and greater unemployment if the Government are not bold in their response. The Office for Budgetary Responsibility has already said that the economy could shrink by 35%, with unemployment soaring to 2 million. Youth unemployment is likely to reach 1 million, with an additional 640,000 young people being made unemployed. We desperately need to support them so that they have hope for the future and we do not lose another generation. They need job guarantees, training, and mentoring and support from wider society.

We also need to make sure in relation to the Finance Bill—it could do so much more, given that it was conceived before the crisis—that Ministers look at the areas where the Government’s programmes following covid do not go far enough, leaving many out. The first is the job retention scheme, and while I welcome the extension to October, many employers are not clear about what their contribution to the furloughed salaries needs to be. That needs to be clarified, and I hope the Minister will do that. Research by the New Starter Justice campaign has found that 83% of its members received no universal credit for April. How do the Government expect them to survive for eight months with no income or welfare? Those in the hospitality sector also face huge challenges because they do not qualify for support. Between 350,000 and 500,000 remain unable to be furloughed, despite the extension of the job retention scheme.



When the Chief Secretary to the Treasury was asked about those issues at the Treasury Committee, he talked about “trade-offs” and “hard edges” to avoid the risk of fraud, but these are not people who are committing fraud. These are hard-working people—hundreds of thousands of them—who are getting no support from this Government. That is wrong, and it must be corrected. I hope the Minister will say something about that, because they desperately need our support.

The Institute for Fiscal Studies estimates that 2 million freelancers in sectors such as arts and entertainment and the creative industries who have some self-employment income are not covered by the scheme, while 675,000 people who get over half their income from self-employment will not be covered. The Government need to act to help them.

Finally, limited company directors are also left out. Local government need support from the Government. Only £3.2 billion of emergency funding has been provided, and yet there is a shortfall of £10 billion. They desperately need the Government to act now, so that they can cope with the crisis. My local authority has lost £35 million of income and will have to spend an extra £25 million to address the coronavirus crisis. The Government need to make sure that they are prepared for tough times. The Bill does not do that, and this particular change does not address the bigger crisis that is looming ahead of us.