Chancellor must ‘fill in the gaps’ to support the self-employed, freelancers & vulnerable people
Chancellor of the Exchequer, Rishi Sunak, has rightly said he will ‘do whatever it takes’ to get us through the Covid-19 pandemic. But the measures he’s announced in the Budget and added to last week aren’t enough.
So over the weekend I wrote to the Chancellor as well as the Work and Pensions secretary, Thérèse Coffey, defining who has missed out in the financial packages announced to date, and what needs to happen for them.
In particular, the support announced for micro and small businesses, as well as for the self-employed, freelancers and other workers in insecure work needs is inadequate. People on social security, including people in low paid work, the sick and disabled people, also don’t have the protections that they should have.
Support for Businesses
Several local businesses, in Oldham and Saddleworth, have contacted me about the measures announced in the Budget and they are, rightly, wary of racking up further debts.
Although the Chancellor changed these business loans to be interest free, I would like the Government to convert them to grants as any additional debt on business now should be avoided.
The Business Rate holidays should also be extended to all industrial sectors identified as vulnerable, for example, the creative industries. But as this is a loss of important revenue for local authorities after a decade of austerity – Oldham Council has lost nearly half its income – this needs to be underwritten by the Government.
Small businesses, especially micros and sole traders are particularly vulnerable, as demand for their products and services significantly reduces or stops altogether, their incomes dries up, and they don’t have the reserves that larger businesses may have.
I’ve also been contacted by constituents who are self-employed, freelance, or are in insecure work and have either already been laid off or have had contracts dry up. Many don’t have savings and now have no money coming in.
I have asked the Government to ensure any outstanding Government, local authority or other public sector agency debts to small contractors are paid, and that Tier one suppliers pay suppliers in their supply chain. I have asked that specific measures for small businesses are also considered in particular those sectors most vulnerable during this pandemic.
Support for Workers
Although the Government’s Coronavirus Job Retention Scheme is welcome, committing to pay employees 80% of their wages up to a maximum of £2,500 per month, this is more about underwriting businesses’ staffing costs than protecting workers. Crucially it doesn’t cover vast swathes of workers; we need measures that will benefit all workers fairly.
Instead the Government announced that social security support would be available for those workers not covered by the Coronavirus Job Retention Scheme. This was not only grossly unfair it is just not practicable. We need measures that can be immediately implemented, are deliverable and financial adequate.
Given the current fragile state of the social security system it is impossible for it to deliver timely funding to tens of thousands, potentially millions of additional applicants over the next 12 weeks.
So the Government must announce measures for the self-employed, freelancers and any other status of worker not covered by the Coronavirus Job Retention Scheme which are equivalent to those being offered to employees.
For those people currently in-work, but whom become unwell or may need to self-isolate, Statutory Sick Pay (SSP) needs to enable them to stay at home without risking ratcheting up their personal debt. The current level of £94.25 per week means many people who should stay at home, may not because they can’t afford to.
In order to control the spread of the virus, SSP must immediately increase to at least 80% of income underwritten by the Government.
A further range of other measures may also need to be considered such as rental payment ‘holidays’ for both private rented sector and social tenants underwritten by the Government, utility payment ‘holidays’ compensated by the Government; and council tax ‘holidays’ also underwritten by the Government.
Protection for people in receipt of social security
As I have repeatedly said, most recently before the Budget, the current levels of social security support for millions of people, particularly those of working age, is inadequate. Since 2010, £37bn has been cut in support to working age people, including to children, the sick and disabled.
People on social security were already suffering before the Coronavirus pandemic. But I have not seen this recognised by the Government either in terms of the defined ‘at risk’ groups or the measures the Government has announced to reduce their infection risk.
The Government should agree to proposals put forward by Child Poverty Action Group, Joseph Rowntree Foundation, Turn2Us, the Children’s Society and other charities to help protect them, including:
- make Universal Credit loans non-repayable;
- stop migration from legacy benefits to Universal Credit by virtue of a change in circumstances;
- provide emergency support for children in the form of a £10 per week per child increase in child benefit;
- suspend all work-search requirements and work preparation;
- provide a temporary uplift in the Universal Credit standard allowance, jobseeker’s allowance, employment support allowance and income support;
- postpone the earnings disregard and capital disregards;
- suspend all sanctions and deductions and ensure automatic immediate access to a hardship payment;
- suspend all repeat Work Capability and Personal Independence Payment assessments;
- suspend the requirements for all new ESA and PIP applicants to undertake an assessment;
- provide all appellants appealing the outcomes of a WCA or PIP assessment with full support;
- increase Local Housing Allowance support to cover local median costs;
- provide clear written guidance for jobcentre staff, including work coaches and decision-makers, and all contractors providing assessments and work-related activity, on these arrangements.
We are at war against this virus, and our response needs to reflect this.