One million missing out on employee support schemes
More than one million people have fallen through cracks in government schemes designed to support them during the coronavirus crisis, MPs says.
The Treasury Select Committee called on ministers to plug gaps in the schemes to fulfil the government’s promise of “doing whatever it takes”.
Freelancers and recent employees are among those who cannot access support, the MPs say. The Treasury said the schemes protected millions of jobs and livelihoods.
But the committee’s interim report, which was unanimously agreed by members, said it was still not enough.
“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,” the committee said.
“The government must assist these people if it is to completely fulfil its promise to do whatever it takes to protect people from the economic impact of coronavirus.”
The MPs said 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 payroll paperwork to the HMRC tax authority.
When lockdown first started, the Treasury said it would cover up to 80% of the salaries of workers who were unable to do their job from home. But those who started a new job after the government’s 28 February cut-off date are not covered by the scheme.
Although this was later extended by three weeks, many have still been left behind, the committee said.
The committee also said the government is failing to help those who have become self-employed within the last year and those whose companies have annual trading profits of more than £50,000.
Another group that has fallen through the net is freelancers or those on short-term contracts. The MPs said that in industries such as television and theatre, where short-term contracts are the norm, many workers are not entitled to support under the schemes.
The report said: “This cannot be right. The government should give this group access to financial support that equates to 80% of their average monthly income, up to a total of £2,500 per month.”
The report comes amid growing unease about the health of the economy, which contracted by a record 20.4% in April. There are warnings of huge job losses once the furlough schemes are wound down. On Sunday, Chancellor Rishi Sunak acknowledged on the Andrew Marr show “there is going to be hardship ahead”.
Treasury Committee chairman Mel Stride 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.”
A Treasury spokesperson said: “The swift and targeted action we’ve taken has protected millions of jobs and livelihoods and our interventions have been rightly welcomed by the select committee.
“Our wide-ranging support package is one of the most comprehensive in the world – with generous income support schemes, billions paid in loans and grants, tax deferrals and more than £6.5 billion injected into the welfare safety net.
“All our support is targeted to make sure we use public funds responsibly, helping those who need it most as quickly as possible, while minimising fraud risk.”