The upcoming U.K. budget is a final opportunity to address “unfair and discriminatory” gaps in coronavirus support affecting the self-employed, mothers who have taken maternity leave, and workers in specific sectors, lawmakers said.
In an interim pre-budget report published on February 26, the House of Commons Business, Energy and Industrial Strategy (BEIS) Committee commended the government for moving quickly at the start of the pandemic to “implement novel and wide-ranging” financial support schemes.
“Whilst we welcome the overall level of support offered, we are disappointed that the government has repeatedly chosen not to adapt and refine its support to address identified gaps in coverage. It is unacceptable that 11 months into the pandemic, approximately 3 million people have fallen through the cracks,” the cross-party committee of 11 members of Parliament said. The committee launched an inquiry in March 2020 into the impact of COVID-19 on businesses and workers.
The U.K. Civil Service announced on Twitter on February 25 that HM Treasury and HM Revenue & Customs teams responsible for coronavirus support schemes had won a public service award. But Chancellor of the Exchequer Rishi Sunak’s failure to plug gaps in support has been widely criticized by campaigners, business groups, and an All-Party Parliamentary Group (APPG) of more than 260 MPs and peers.
The BEIS Committee said it agreed with the Treasury Committee’s February 15 report “that the government’s approach to employees and self-employed people has in practice been inconsistent, unfair, and discriminatory.”
New mothers appear to have fallen through the cracks because the method of calculating grants under the self-employment income support scheme “discriminates against women who have taken maternity leave in the last three years,” the committee reported. Pregnant Then Screwed, a campaign group, said this increased the likelihood of women’s businesses failing because of a lack of financial support.
“Alarming gaps in support” arose because of eligibility criteria set by the government, BEIS Committee Chair Darren Jones said in a statement. “Most significantly, this has had the effect of discriminating between self-employed workers and employed workers.”
Jones said Sunak’s March 3 budget presents “a final opportunity to get this right.” The committee said it was disappointed by the government’s suggestion that support through universal credit, local authority grants, and mortgage and consumer credit holidays were “a sufficient replacement” for people unable to access support through the job retention scheme or the self-employment income support scheme. “The repeated use of the risk of fraud as an adequate justification for not addressing gaps in support for workers is also unconvincing,” it said.
Further government action is required to support sectors of the economy, such as the creative industries, where gaps in support “appear to have fallen disproportionately,” the committee argued.
A lack of targeted support “is exacerbating the divide” between businesses that have had to close and those which have not, according to the committee. “We are particularly concerned for ‘bricks and mortar’ retail, which is unable to compensate for physical closure, as well as businesses such as those in the ‘live events’ industry, which, though not legally forced to cease operations, have seen a collapse in business due to health restrictions,” it said.
The APPG on Gaps in Support called on Sunak to “urgently plug devastating gaps.” A February 26 report titled “Filling the Gaps in Support” recommends several policy adjustments to the existing schemes “to support the newly self-employed, [Pay As You Earn] freelancers, limited company directors, new parents, and pregnant women,” the APPG said in a release.
“Small businesses, sole traders, and entrepreneurs should be the driving force of the U.K.’s economic recovery in the months and years ahead. If we do not support them now, we will all feel the consequences,” said APPG Chair Jamie Stone.
“Without targeted support, jobs will be cut, hard-earned savings will run dry, and livelihoods will be lost. It will cost the government much more to deal with this issue further down the line than if reasonable support were provided now. Without these individuals and businesses, the U.K. cannot ‘build back better,’” Stone added.
“The Treasury has the tools and the information needed to act on the APPG’s proposals — all that is lacking is the will to do so,” said APPG co-Chair Tracy Brabin.
Brabin has introduced a private members’ bill requiring the government to conduct an assessment of gaps in financial support and report to Parliament on the steps it intends to take to address them.