- [Relevant documents: Second Report of the Treasury Committee, “Economic impact of coronavirus: Gaps in support”, HC 454; and the Government responses, HC 662 and HC 749; Eighth Report of the Treasury Committee, “Economic impact of coronavirus: the challenges of recovery”, HC 271; e-petition 303345, “Pay self employed workers a wage due to lack of earnings caused by covid-19”; and e-petition 310471, “Provide covid-19 income support for the newly self-employed, without HMRC records”.]
- 3:15 pm
- I beg to move,That this House has considered support for the self-employed and freelance workers during the covid-19 outbreak.I am grateful to the Backbench Business Committee for granting time for this important debate, which affects so many of our constituents. The job retention and self-employment income support schemes have provided a lifeline for many, and they have undoubtedly provided a degree of security for those who were eligible. But there’s the rub: far too many people have been ruled ineligible.Today’s debate takes place just as the six-month period that the self-employment scheme was intended to cover draws to a close. I intend to make the case that the scheme should be continued where it is needed and, crucially, that it should be extended and backdated for all those people who have been unfairly left without support over the last six months through absolutely no fault of their own, and who have endured intense hardship as a result.Many cannot pay their bills. They are losing their homes, they are drowning in debt and they need our support. Today’s debate is a sorely needed opportunity to set out how the self-employment scheme has fallen short. It has fallen short by failing to recognise the reality of what self-employment looks like in Britain today—by failing to understand that self-employment is significant across the breadth and depth of our economy. The self-employed are beauticians and barristers; charity and construction workers; dentists and decorators; many in marketing, events, arts and hospitality, and many more. This is a chance for us to explain loudly and clearly why self-employed people need justice and why they need support as we go forward.As it stands, as I am sure all hon. Members know—although, frankly, I am less sure that Treasury Ministers know—the Government scheme penalises a wide range of people. They include those who combine self-employment with pay-as-you-earn work, or PAYE freelancers. They include new start-ups and the recently self-employed. They include women who have taken time out for maternity leave and childcare. They include anyone earning over £50,000. They include those earning less than 50% of their income from self-employment. They include limited company directors who take their income in the form of dividends.There have been endless requests for the Treasury to meet MPs and those affected by the scheme’s failings to discuss those gaps. Frankly, the exchange between the Chancellor and the hon. Member for Batley and Spen (Tracy Brabin) during Treasury oral questions earlier this week underscored how urgently such a meeting is needed. I am not sure whether the Chancellor just does not understand his own scheme or whether he was deliberately being economical with the truth, but when he asserted that the only group of people excluded from the self-employment scheme is those earning more than £50,000, and that their average median salary is apparently £200,000, I did not know whether to laugh or cry. He is completely and utterly wrong. He does not understand his own policy, and we urge him again to meet us so that we can set out the problem.
- One of the forgotten sectors is music teachers who teach our young people. Many of them—including some in my constituency, as well as throughout the United Kingdom of Great Britain and Northern Ireland—do not have any income whatever. They are one of the forgotten groups as well.
- I thank the hon. Gentleman for his intervention. I absolutely agree. The people we are talking about are in every sector of our economy and our society, and they are hurting.Back in June, the Treasury Committee published a unanimous report called “Gaps in support” as part of the inquiry into the economic impact of coronavirus. It found that hundreds of thousands of self-employed people are suffering hardship because of features like the disqualification of anyone who started a business in the last year. The Select Committee made some clear practical recommendations for change. I agree with the Chair of the Committee, the right hon. Member for Central Devon (Mel Stride), that urgently enacting those recommendations and helping those who have fallen through the gaps is the only way for the Government to, as he puts it, fairly and“completely fulfil its promise to do whatever it takes”.Sadly, the Government’s response to the “Gaps in support” report was predictable: they made excuses and cited obstacles, when what we need is action. So let me say just a little more about some of those who are falling through the gaps. I mentioned small limited companies whose directors take all or part of their income in dividends. I want to stress that that is common practice; there is nothing suspicious about doing that—it is what people do when they are starting up small businesses, and they plough that money back into those businesses in the early days.
- How is Her Majesty’s Revenue and Customs meant to know where the dividend income comes from, because when people fill in their tax return, they do not have to say the source of it? It could be dividend income from massive stock market investments, and why should they get subsidised for that?
- A whole range of practical proposals has been set out by the Treasury Committee, ExcludedUK and many others documenting the other paperwork that could be presented, including records from tax returns and so forth, that can make sure that this scheme is not open to fraud. If the political will is there, a way can be found using a range of different documentation to demonstrate that the money that people are applying for is absolutely legitimate. We can look at bank statements, for instance. It is not beyond the wit of people to make sure that people in our constituencies are not literally having to go to food banks, as an hon. Member mentioned the other day, in order to be able to put food on the table.
- When I raised this very issue with the Treasury Minister, I highlighted the fact that the records are held in Companies House and all HMRC has to do is marry up the records. The reason he gave was that they did not have enough staff at HMRC. Is that not just a complete disgrace?
- I thank the hon. Lady for making that point. She is of course absolutely right, and it would be a simple measure to do this if the political will were there.
- Would these things not be able to be thrashed out one to one in the meeting that still has not taken place that the hon. Lady mentioned?
- The hon. Lady is exactly right. Just a first step will be for the Government to acknowledge that there is a problem. Instead of sticking their fingers in their ears and going, “La, la, la”, they need to accept there is a problem here, and I am sure if we all got around the table we could find a way through this.The vast majority of those small limited companies do not have commercial premises either, so they do not qualify for business grants. Nor do they see taking on large debts in such an uncertain business landscape as a realistic option. Furlough has been a Catch-22 for company directors: unpredictable cash flow means their salaries are low, so the scheme does not cover living expenses, yet if they furlough they are not allowed to work on saving the businesses that are in question.The scheme has also routinely excluded carers and parent. As part of its inquiry into the impact of covid-19 on maternity and parental leave, the Petitions Committee heard evidence from the brilliant campaigning group, Pregnant Then Screwed. It was told that, because the self-employed scheme fails to properly accommodate women who incur a loss of earnings when taking time off for maternity leave, the gender pay gap among the self-employed, which is already at 43%, will increase, as will the likelihood of women’s businesses failing due to a lack of financial support.
- The hon. Member is absolutely right that people furloughed generally are not allowed to work. But there is an exemption that the Government brought in for company directors who are furloughed—they are allowed to carry on with their company director duties, including saving their business.
- If they do not have any money, they cannot save their business, can they? That seems an odd intervention to make.The Petitions Committee urged the Government to amend the scheme to take into account periods of maternity and paternal leave to ensure fairness and equality, yet, once again, Ministers have deliberately looked the other way. That phrase “whatever it takes” apparently does not stretch to ending discrimination against self-employed women. Nor do they care very much about freelancers, especially those on short-term PAYE contracts, as is now common practice because of HMRC requirements. They are caught between a rock and a hard place: denied access to the job retention scheme and the chance to be furloughed, yet often not earning enough from self-employment to qualify for the self-employed scheme.In some sectors of our economy, freelance working is especially common. In my own Brighton constituency, for example, a number of people work in the arts. Three in four jobs in the arts across the country are freelance. They are the people who make the plays, the musicals and live experiences that are a part of the fabric of British life. We do not always see what they do, but they are invaluable, yet one in three of the skills base in theatre, for example, have missed out on any Government support since March, with disabled people, people of colour and early career workers disproportionately affected. Young people are also over-represented compared with other sectors of the economy. Therefore, rather than recovery, we see a sector that is facing total collapse.Failure adequately to support the cultural, creative and events industries has put at risk 16,000 jobs across Brighton and Hove and £1.5 billion in turnover. My inbox, like, I am sure, the inboxes of many other hon. Members, is full of emails from constituents forced to abandon long-standing careers in the arts because there is no income support for them as freelancers.
- There is a four-minute limit.
- 3:30 pm
- What a powerful start to this debate we have just heard from the hon. Member for Brighton, Pavilion (Caroline Lucas), laying out with passion the case that has, to some extent, not been heard by those on the Treasury Bench throughout this crisis.I want, in part, to echo a number of the points the hon. Lady made and take hon. Members back to the start of the crisis when all of us as Members of Parliament were met with a series of increasing issues from our constituents. They were worried about not being able to get groceries from their local grocery store. They had loved ones who were overseas. They were worried about their jobs. People could not get loans to keep their businesses supported.Time and again, those issues were sorted out by the Government to a greater or lesser extent and answers were found. At the end of all that, however, as many hon. Members will know, there was one group that remained excluded from a number of levels of support or where their ability to access that support was not sufficient—the millions of people in this country who are self-employed.I want to go through some of those issues passionately, if I can, but also with facts. I am sure the Minister will respond with facts, and quite rightly so. She will, I am sure, mention the fact that the Government did find the right arteries, if I can call them that, to get the support to people, particularly those in the job retention scheme and others. That was a tremendous success. The ease with which people were able to access the support when they qualified was also a tremendous success.The overall record for the Government in terms of economic programmes and international comparisons was also a great success. However, this debate is not about those successes; it is about the omissions from those programmes. A fact it would be helpful for the Minister to provide is to reconcile the difference between the Government’s assertion that 95% of the self-employed are covered and the other assertion that there are 3 million excluded. That would be a helpful reconciliation to have.
- Will my hon. Friend allow me to assert the fact that some people who are self-employed have been able to get back to work, but many involved in large industries such as culture, entertainment, film and music have not been able to because those events are not taking place?