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Over a million people have fallen through the gaps of
Government’s coronavirus support schemes
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Treasury Committee makes recommendations to help those
in need of support
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Government should enact recommendations to fulfil its
promise of “doing whatever it takes” to protect people and
businesses from impact of coronavirus
The Treasury Committee has today published a unanimously-agreed
interim report as part of its inquiry into the Economic Impact of
Coronavirus called Gaps in Support.
Report Summary
The Chancellor has frequently stated that he will do whatever it
takes to protect people and businesses from the effects of
coronavirus. Support measures, including the Coronavirus Job
Retention Scheme (CJRS) and Self-Employment Income Support Scheme
(SEISS), have been introduced by the Government to protect the
livelihoods of salaried and self-employed individuals. The
Treasury’s interventions have been welcomed by many, but rolling
out financial support at pace and scale has inevitably resulted
in some hard edges in policy design and some critical gaps in
provision. More than two months into lockdown, many people
continue to endure financial hardship whilst being unable to
benefit from the Government’s two principal support schemes. The
inquiry has identified the following key concerns and made a
series of recommendations for how the Government can assist these
people:
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Those newly in employment: Hundreds of thousands
of people are suffering financial hardship through no fault of
their own, often due to unfortunate timing in starting a new
job or their employer’s choice of timing in submitting
paperwork to HMRC. The Government must find a way to extend
eligibility criteria to all new starters, perhaps by extending
the cut-off date to 31 March, or by accepting alternative forms
of evidence of employment.
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Those newly self-employed: Many people who have
started a business in the last year don’t qualify for support
from the SEISS as they cannot fulfil the eligibility criteria.
The Government should undertake an urgent review to see how it
can extend support to this group of people.
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Those self-employed with annual trading profits in excess
of £50,000: Hundreds of thousands of people are
potentially suffering hardship because of the arbitrary £50,000
cut-off in the SEISS. The Government should remove the £50,000
cap and allow those with profits just over this cap access to
some financial support, up to £2,500 a month.
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Directors of limited companies who take a large part of
their income in dividends: The Government has failed to
take action to help the hundreds of thousands of limited
company directors missing out on support because they pay
themselves in dividends. The Government must find a way to
support these individuals. We urge implementation of a solution
whereby HMRC requests additional information about the
proportion of dividends that have come from company profits and
from other sources, and requires self-certification by the
applicant.
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Freelancers or those on short term contracts: In
industries such as television and theatre, where short-term
PAYE contracts are the norm, many workers are not entitled to
support under the CJRS or SEISS. This cannot be right. The
Government should give this group access to financial support
that equates to 80 per cent of their average monthly income, up
to a total of £2,500 per month.
Commenting on the report, , Chair of the
Treasury Committee, said:
“The Chancellor has said that he will do whatever it takes to
support people and businesses from the economic impact of the
pandemic.
“Overall, he has acted at impressive scale and pace. However,
the Committee has identified well over a million people who –
through no fault of their own – have lost livelihoods while being
locked down and locked out of the main support programmes.
“If it is to be fair and completely fulfil its promise of
doing whatever it takes, the Government should urgently enact our
recommendations to help those who have fallen through the
gaps.”
--Ends--
Notes to Editors
- The embargoed
report is attached. Further information on the Treasury
Committee’s inquiry into the economic impact of coronavirus
is here.
