Coronavirus: Job-Support Schemes

Debate between Steve Brine and Meg Hillier

Tuesday 7th July 2020 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I thank the right hon. Member for Central Devon (Mel Stride) and his Committee for their work on this issue. I represent a constituency—indeed, part of a borough—that is the epitome of the gig economy. That is an economy and style of working that this Government have helped to foster, with people working in different ways, and on different pay and conditions. It includes everything from people on zero-hours contracts to sole directors of companies, from people on repeated short-term contracts to people who are 100% freelance. Although the Government’s measures have included support for quite a lot of freelance workers, they have excluded, as the right hon. Gentleman has said, at least 700,000—if not, as his Committee estimates, a million—people, who are not supported by the schemes.

I have raised the matter repeatedly in this House, and we have had assurances from the Government that they have introduced a world-beating, groundbreaking set of initiatives to support people who are on furlough and self-employed. They keep parading that as though it were the answer to the question we are asking. Let me be absolutely clear: we could talk a lot about that, but the right hon. Gentleman has covered that territory and I do not need to repeat what he has said. We are talking today about the people who have not had a penny of income for the past four months. For around 100 days, they have had no money coming in.

I completely agree with the hon. Member for Winchester (Steve Brine). Those are not people who have been trying it on, chancing it or thinking that they can avoid tax by some clever dodge; they are hard-working people who have used mechanisms that have been promoted not just by the Government, but by Governments over time, and that have been particularly supported by this Government. They were told, “We will do whatever it takes,” but when push came to shove, they were left out in the cold.

I will give some examples. I came across a shocking example of somebody who worked as an occupational therapist in the NHS—not employed by the NHS, but delivering NHS services—and who was required to go into a personal service company to make sure that they had the required limited liability insurance. That reason drives many individuals to set up such companies. It is either that, or their house or other assets will be on the line—if they have them. I want to be really clear that most of the people who have contacted me about the matter are not on big incomes.

I will take another sector as an example. People who work in broadcasting and television are often on short contract after short contract. They are employed, but only for short timeframes, so they do not qualify for this support. Others who were freelance and employed, but the balance was wrong, got short-changed on this deal.

I think there is a technical challenge with sole directors of companies that is more difficult to solve, notwithstanding what I have said about many people being driven to that route. However, when people have records with HMRC—when they have paid tax while on short contracts or through self-employment, even if not for the length of time stipulated by the Government—it is not beyond the wit of this House, this Government, man or woman to work out how to deliver a solution for them. If they have a tax record, the reverse engineering that was done for other self-employed and employed people could surely be done for members of this group.

I urge the Minister, who has told me that he is reflecting on this, not to reflect but to act. After 100 days, where are people going to find work now? They need a solution, and they need support.

[Steve Brine]

Several constituents have said to me, “I will be quite honest with you; I did not need the help. I was not able to get any, but I did not need it.” The Government may have feared that everyone who earned the majority of their income from dividends would suddenly come forward and add a huge burden to the self-employment income support scheme, whereas the reality was that we could have trusted people. Yesterday, Barratt displayed a huge amount of corporate responsibility by saying that it would pay back the money that it had claimed through the furlough scheme. The fact is that a lot of people out there did not need the support, and they might not have come forward and claimed it. Perhaps we should have trusted them a little more and been a bit more flexible with the scheme.

[Meg Hillier]

The hon. Gentleman raises an interesting point. One of the issues that I have been looking at in the Public Accounts Committee is the fraud and error in this. I am absolutely in favour of the schemes that have been proposed. I am also keen that the Government come down hard on anyone who has tried to break the rules—I think we agree on that.

It is really important to remember that a lot of these people are not on big incomes—they have absolutely nothing. Because of the high price of housing in London, they are often renting properties, and they are at their wits’ end in how they can manage. This is devastating for them, and these are the people who will be the engine of any economic uplift. We also need to recognise that if we are going to foster this type of economy and working, there needs to be a safety net for people. They did not choose to take this risk. Someone working in broadcasting does not choose to be on a short-term contract; that is just the way the industry works. And do not get me started on the implications of the IR35 reforms. We have had that debate elsewhere, and it is one for another day, but I hope that others in the Chamber agree with me on that.

We need a solution. These people cannot live on fresh air. They cannot keep going on nothing. In many cases, their income will not magically increase in October or anywhere between now and then or next spring, especially if they work in the hospitality sector. I really hope that we will get some answers from the Minister today, and once again, I applaud the work of the Treasury Committee in highlighting these very real issues for many of my constituents.