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Covid-19 Support Schemes: Ineligible People
09 December 2020
Lead MP
Munira Wilson
Twickenham
Lib Dem
Responding Minister
John Glen
Tags
Crime & Law EnforcementNHSDefenceEconomyTaxationEmploymentMental Health
Word Count: 9566
Other Contributors: 16
At a Glance
Munira Wilson raised concerns about covid-19 support schemes: ineligible people in Westminster Hall. A government minister responded.
Key Requests to Government:
I urge the Government to urgently address this glaring injustice by implementing solutions such as using HMRC data for claims, widening accepted evidence for proof of employment, extending cut-off dates, and removing the 50% rule. The Chancellor should be Santa Claus this Christmas rather than a bear that leaves people behind.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
I am concerned about the significant number of people, approximately one in ten of the workforce, who fell through the gaps in the furlough and self-employment income support schemes. This includes individuals such as new starters, newly self-employed workers, those over the £50,000 threshold, directors of limited companies paid via dividends, PAYE freelancers, and new mothers. Many of these individuals have experienced severe financial hardship, including reliance on food banks and inability to afford heating during winter. The mental health impacts are also profound, with reports of suicides and increased depression among the affected population.
Congratulating the hon. Member for Twickenham on securing the debate, Andrea Leadsom praised the Chancellor's policies but also expressed sympathy for specific businesses and sectors that have missed out due to timing issues or irrelevant support types.
Thanking the Government for its £210 billion fiscal response to the pandemic, Andrew Selous noted that individuals such as construction industry scheme card holders, directors paying themselves through dividends and newly self-employed workers have received less support compared to those in PAYE employment.
Houghton and Sunderland South
Critiqued the Government's schemes for failing to support many workers due to gaps in eligibility criteria, highlighting issues faced by newly self-employed individuals, those affected by the 50% threshold, and women on maternity leave. Emphasised ongoing discrimination against women post-maternity leave.
Caroline Nokes
Con
Romsey and Southampton North
The speaker acknowledged the challenges faced by newly self-employed individuals and provided specific cases from her constituency, including a make-up artist who used her husband's pension to set up a business, a couple living on child benefit due to reduced income, and an individual supplementing their small pension with self-employment but not eligible for support.
Christina Rees
Lab
Neath
Reminded Members about new call list system and social distancing measures. Advised to sanitise microphones before use and dispose of materials afterwards. Instructed those late in the call list to use Public Gallery seats.
Christine Jardine
Lib Dem
Edinburgh West
The speaker highlighted that about 3 million people are ineligible for Government support despite being the backbone of the economy, such as self-employed individuals and those in creative sectors. She shared examples of constituents struggling due to lack of assistance.
The speaker applauded the scale of financial support provided by the Government but pointed out that many self-employed individuals and freelancers were left behind. He mentioned a local business owner, Liz Huband, who was ineligible for the self-employment income support scheme due to part-time work, leading to distress and suffering.
Emma Lewell
Lab
South Shields
The speaker expressed anger at the Government's denial of support to 3 million people, highlighting cases such as a self-employed filmmaker denied support and forced into benefits. She also cited an example of a family business struggling due to the pandemic and turning to selling equipment for survival.
Esther McVey
Con
Tatton
Paying tribute to the hon. Member for Twickenham, Esther McVey highlighted the campaign asking supermarkets to return their covid business exemption money to support those who have had no financial assistance during the pandemic period.
Imran Ahmad Khan
Lab
Manchester Gorton
Since the start of the pandemic, most people and small businesses received timely support from the government. However, a large number fell through the cracks. One example is Graham Whitehead, who became self-employed in January 2019 but did not meet the threshold of 50% self-employed income for the tax year, receiving only £6.27 in universal credit by July 2020. Imran urged that funds returned to the Treasury from Tesco and Sainsbury's should be repurposed to support those who have yet to receive adequate support.
Jeff Smith
Lab
Manchester Withington
Jeff highlighted cases of individuals in Greater Manchester, including Luana, Shan, and Zena, all of whom were recommended to pay themselves through dividends but are struggling due to irregular income. He asked the Minister to look at proposals from organisations such as the Federation of Small Businesses for a director support scheme based on trading profits. Jeff urged the Minister to listen to constituents who have fallen through the gaps.
The speaker praised the Government's economic response during the pandemic, noting benefits like bounce back loans and furlough schemes. He also called on the Minister to ensure businesses that were not in financial trouble return the rate relief received from the government.
Peter Grant
SNP
Glasgow North
Commends the hon. Member for Twickenham on securing the debate and highlights that 3 million people are ineligible for support due to a deliberate policy decision by the Government. Mentions Gemma, who moved from employed to self-employed in 2019 but did not qualify for support despite submitting her tax return showing accurate earnings. Also mentions Joanna, whose pensions were counted towards earned income in 2018-19 and is now ineligible due to an accident involving a family member. Asked why HMRC and Treasury have not done a data-matching exercise between their records and Companies House to distinguish between directors of small companies and anonymous investors in large ones, nine months into the pandemic.
Richard Fuller
Con
North Bedfordshire
Richard thanked the hon. Member for Twickenham and focused on company directors as risk-takers crucial to our recovery. He suggested a standard reporting event where people can demonstrate a negative impact on their business and confirm they have not received any benefit from Government under existing schemes. Richard urged the Minister to find ways to support these individuals with scarce taxpayers' funds.
Stephen Morgan
Lab
Portsmouth South
The speaker expressed concern about the exclusion of many self-employed individuals from support schemes, highlighting a constituent who started as a driving instructor recently and therefore did not qualify for financial aid. The MP criticised the government's failure to deliver promised support, describing affected people as 'collateral damage' due to economic illiteracy.
Chairing a meeting of the gaps in support all-party parliamentary group, Tracy Brabin highlighted that an estimated 68,000 people are excluded from support in Yorkshire, affecting entrepreneurs, business people, creatives and strivers who have been paying a heavy price for flexibility.
Government Response
John Glen
Government Response
It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate the hon. Member for Twickenham on securing the debate and thank Members for their contributions which spoke powerfully to cases of hardship throughout the country. The pandemic has profoundly affected countless people; we have spent £280 billion on one of the most comprehensive responses including the job retention scheme, self-employment income support scheme, affordable loans, extra welfare help, bespoke interventions, and other support measures like income tax time-to-pay arrangements. We had to set clear rules when designing schemes due to the need to target those most in need and protect taxpayers from fraud; this included setting a profit cap of £50,000 for self-employment income support scheme eligibility, requiring half of income from self-employed activity, using data from tax returns, which meant people who became self-employed in 2019-20 could not access the scheme. We are listening closely to individuals paying themselves through dividends but it presents a challenge as there is no way of distinguishing between dividends derived from an individual's own company and those from other sources. Despite challenges, we have adapted schemes by extending eligibility criteria for furloughing workers and helping new parents and self-employed armed forces reservists with the scheme. People ineligible for one scheme may still be able to get support from other sources such as tailored employment support through the £2.9 billion restart programme announced by my right hon. Friend the Chancellor of the Exchequer recently. We will continue to work with groups bringing forward proposals and look at new schemes moving into the new year.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.