“We have not been able to help every single person in exactly the way they would have liked to be helped.” So said Rishi Sunak, the Chancellor of the Exchequer, last June, conceding that certain people were falling through the gaps of the Government's extensive Covid-19 financial support package for businesses, employers, employees and the self-employed.
The Chancellor’s argument back then was that the rapid onset of the pandemic had forced the Government to move very quickly to put help in place. Sunak explained he had looked for mechanisms that would help as many people as possible, and as quickly as possible, in the face of the crisis.
Fair enough. But six months later, the Chancellor continues to refuse to address the plight of those who missed out. And to be clear, we are not talking about a small number of people here. More than 3 million Britons, for one reason or another, do not qualify for any of the business support that the Chancellor is offering.
There are three groups who account for the vast majority of that figure according to analysis from Excluded UK, the pressure group set up to make the case for the extension of government support.
First come the 1.6 million self-employed people missing out on help from the Self Employment Income Support Scheme (SEISS). Around two-thirds of these people are those who earned less than half their income from self-employment in the tax years prior to the pandemic, and thus fall foul of the arbitrary rule that you must earn more than 50% of your income from self-employment to qualify. Another important constituency is those who went self-employed for the first time in the 2019-20 tax year; they also miss out automatically. Then there are the people who previously earned more than £50,000 a year from self-employment, who can’t claim from the SEISS even if their income has dwindled to nothing amid the pandemic.
The second big group of excluded people is the more than 700,000 company directors who previously earned an income by paying themselves company dividends rather than through the PAYE system. This was – and is – an entirely legal and legitimate way to organise your tax affairs, yet the Chancellor has ruled directors in this camp cannot claim any help.
Last but not least are nearly 800,000 people who aren’t being supported by the Coronavirus Job Retention Scheme, through which employers can put staff on furlough and continue to pay them 80% of their wages, claiming the money back from the Government. This group includes many new job starters, lots of freelancers and those whose employers have refused to take part.
These figures are not in dispute, by the way. While the Chancellor said last year that he “quibbled with the numbers”, the National Audit Office’s investigation into the numbers excluded from help reached very similar conclusions to the research done by Excluded UK.
There is no good reason for the Chancellor to stick to his guns in this way. In the months following the arrival of Covid-19 on the UK’s shores, it was understandable that the Government’s scrambled response to the crisis might overlook some people who needed support. But two weeks into what is now the third lockdown for most parts of the UK, this dogmatic insistence on not helping the people who missed out first time around – many of whom are suffering extreme financial hardship – looks impossible to defend. It doesn’t even make economic sense, forcing people to turn to the benefits system, rather than supporting them with assistance that might just enable them to keep businesses up and running long enough to get them into a position where they can start generating tax revenues once again.
