[Relevant Documents: Second Report of the Treasury Committee, Economic impact of coronavirus: Gaps in support, HC 454 e-petitions 200336, 310515, 319899, 303345, 301328, 310471, 310679, 311987, relating to Covid-19 support for employees and the self-employed.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2021, for expenditure by HM Revenue and Customs:
(1) further resources, not exceeding £61,844,066,000 be authorised for use for current purposes as set out in HC 293 of Session 2019–21,
(2) further resources, not exceeding £227,474,000 be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £61,860,408,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Jesse Norman.)
May I begin by thanking the Backbench Business Committee for allocating time for this important debate? I say that it is an important debate because, of course, Her Majesty’s Revenue and Customs is seeking an additional £52 billion as part of the main estimates, those being attributable to the principal job support measures that the Government have brought forward—about £42 billion for the furlough scheme and a further £10 billion for the self-employed income support scheme. Those are vast sums. Even as a proportion of the entire amount that the Government are spending to support businesses and individuals and the economy during this period, those are very sizeable sums indeed. As we know, the amount that has gone into supporting those on furlough is around the equivalent, on an annualised basis, of the day-to-day spending of our national health service.
I think that, in the round, the Chancellor should be applauded for having come out with these measures to support the economy, individuals and businesses, and for both the scale of what he and the Government have delivered and the pace with which it has been delivered. It is important for me to express on the record my satisfaction with both those points.
However, when we come forward with measures of that scale and at that pace, it is almost inevitable that there will be hard edges to policy and, indeed, gaps through which people fall. There are people whom one would normally want to have support who have not yet received that support. That has been the focus of the considerable amount of work that the Treasury Committee has undertaken, with 12 inquiry sessions and a first call for evidence that received a near-record 16,000 responses from self-employed people and those working in businesses up and down the land who are very concerned about these gaps in provision.
I shall focus briefly on two groups in particular. The first is those who are self-employed and choose to work through a limited liability company, paying themselves both by way of pay-as-you-earn income and through dividends received through that company. The problem arises when it comes to calculating the furlough entitlement for those individuals: it is based solely on their PAYE income and does not take into account in any way the income, albeit self-employment income, that they receive by way of dividend.
Of course, when we had the head of HMRC before our Committee, we asked him about that. I have to say that Jim Harra is a very capable head of HMRC; I worked with Jim when I had strategic responsibility for HMRC as a Minister at the Treasury some time ago, and he is a very capable man. However, he did not give the answer that the Committee wanted to hear on that occasion. He did not allude to the problem being anything to do with the expense involved; he talked about the administrative difficulties of differentiating between income received by self-employed people by way of dividend and other income received by way of dividend, perhaps in respect of passive investments, for example.
I recognise that there is a complication there. However, the question has to be: is it an insurmountable complication? Our Committee’s investigations suggest that it is not. HMRC could adopt an approach of basically paying out on the furlough scheme, having a clawback arrangement in place in the event that mistakes are made, and perhaps having a penalty regime alongside that, first to discourage erroneous claims and secondly to help fund the activity involved in policing those arrangements.
The reality is that we estimate that there are some 700,000 people in that situation who, for the last four months, have not had the support, or the full level of support, that many millions of others up and down the country have received. That cannot be right. It cannot be right because the Government, when they set out their strategy to resolve and tackle the crisis, stated that right at the heart of their mission would be fairness towards individuals and groups. I do not believe that that has been demonstrated in the case of the 700,000 individuals who are not getting the support that they should be.
The second group are the new starters: those who took up employment typically around March this year. There was originally a deadline or cut-off point of 28 February for the receipt of furlough—people had to have been employed prior to that date. That was then shifted, for which the Committee was duly grateful, to 19 March. Yet there will still be many individuals who joined businesses before 19 March but, because there was not an electronic communication regarding that employment between the employer and HMRC prior to 19 March, they do not qualify for furlough support. The Committee believes the Government should look more closely at that. Our recommendation in that respect has been to push the date back to the end of March.
There are a number of other categories of employed and self-employed, such as freelancers, those on short-term contracts and many others, who are not receiving the support we believe they should be entitled to. If we total all of them up, our estimate is that certainly more than 1 million people are falling through the gaps. There are others who estimate that figure to be nearer 2 million or 3 million people.
As ever, I am listening very carefully to my right hon. Friend. I have followed the work of his Committee and the very sound things he has said on this matter. He alluded to this, but the heart of this issue, whether it relates to people who are new to self-employment, new to employment or take the majority of their employment through dividends from limited companies, is that we made the bad the enemy of the good. The vast majority in this space who missed out on help were not trying anything on; they were just doing their thing as entrepreneurs in the British economy and were then left out. What we should have done was get help to them to do whatever it takes. HMRC, as we both know, is not averse to taking back what it thinks has been wrongly taken. We really should have got help out there and then claimed it back if needed. Does he agree that the two schemes fell down on the universality of doing whatever it takes?
I thank my hon. Friend for his intervention and I think he is entirely right. It is simply the case that those who choose to take their income through limited companies by way of dividend are operating entirely within the rules. I do not think there is anybody, HMRC included, who would dispute that, and that lies at the heart of why they should be treated fairly.
Perhaps I could just address two further points in relation to the Government support schemes and ask the Minister if he could comment on them in his wind-up. The first relates to lockdowns. One has already occurred in Leicester, but there may be further lockdowns, unfortunately, across the country. They will be localised, and it is very sensible that they should occur. Undoubtedly, however, they will impose very considerable further economic and social hardship on communities. I have written to my right hon. Friend the Chancellor to ask him what measures he may be considering bringing forward to provide further assistance to those communities in those circumstances. It occurs to me, for example, that the Minister might like to comment on the specific suggestion that businesses in such an area might have more flexible access to the furloughing of staff and be freed from some of the current restrictions in that respect. I would be interested in my right hon. Friend the Financial Secretary’s comments on that.
Secondly, in Treasury questions this morning a number of Members asked whether there would be some kind of targeted support when the wholesale nature of the support schemes ends at the end of October. I think the Chancellor is signalling that he is quite resistant to that. I would want to push back on that and say that we should keep our powder dry and wait and see. The Chancellor rightly said that people talk about sectors but often do not explain exactly which sectors. Part of the reason for that is that it is not clear at this stage, because things are unfolding in such an uncertain manner and it is not absolutely clear where the different parts of the economy will be in autumn. However, I think it only prudent that the Treasury keeps a very close eye on the sectors that are still damaged and inhibited as a result of social distancing, but, critically, still have the ability to grow and thrive once we come through the crisis.
That is the kind of business where I think some targeting of these schemes would be appropriate.
I notice from the clock that I have reached 10 minutes, Mr Deputy Speaker, so in line with your earlier exhortation, I will conclude. I thank the Backbench Business Committee for giving us this opportunity. I ask the Minister please to look closely at the gaps that the Committee has identified. Finally, I wish the Treasury well in the enormously important and difficult decisions that it will have to take in the weeks and months that follow.
I thank the right hon. Member for Central Devon (Mel Stride) and his Committee for their work on this issue. I represent a constituency—indeed, part of a borough—that is the epitome of the gig economy. That is an economy and style of working that this Government have helped to foster, with people working in different ways, and on different pay and conditions. It includes everything from people on zero-hours contracts to sole directors of companies, from people on repeated short-term contracts to people who are 100% freelance. Although the Government’s measures have included support for quite a lot of freelance workers, they have excluded, as the right hon. Gentleman has said, at least 700,000—if not, as his Committee estimates, a million—people, who are not supported by the schemes.
I have raised the matter repeatedly in this House, and we have had assurances from the Government that they have introduced a world-beating, groundbreaking set of initiatives to support people who are on furlough and self-employed. They keep parading that as though it were the answer to the question we are asking. Let me be absolutely clear: we could talk a lot about that, but the right hon. Gentleman has covered that territory and I do not need to repeat what he has said. We are talking today about the people who have not had a penny of income for the past four months. For around 100 days, they have had no money coming in.
I completely agree with the hon. Member for Winchester (Steve Brine). Those are not people who have been trying it on, chancing it or thinking that they can avoid tax by some clever dodge; they are hard-working people who have used mechanisms that have been promoted not just by the Government, but by Governments over time, and that have been particularly supported by this Government. They were told, “We will do whatever it takes,” but when push came to shove, they were left out in the cold.
I will give some examples. I came across a shocking example of somebody who worked as an occupational therapist in the NHS—not employed by the NHS, but delivering NHS services—and who was required to go into a personal service company to make sure that they had the required limited liability insurance. That reason drives many individuals to set up such companies. It is either that, or their house or other assets will be on the line—if they have them. I want to be really clear that most of the people who have contacted me about the matter are not on big incomes.
I will take another sector as an example. People who work in broadcasting and television are often on short contract after short contract. They are employed, but only for short timeframes, so they do not qualify for this support. Others who were freelance and employed, but the balance was wrong, got short-changed on this deal.
I think there is a technical challenge with sole directors of companies that is more difficult to solve, notwithstanding what I have said about many people being driven to that route. However, when people have records with HMRC—when they have paid tax while on short contracts or through self-employment, even if not for the length of time stipulated by the Government—it is not beyond the wit of this House, this Government, man or woman to work out how to deliver a solution for them. If they have a tax record, the reverse engineering that was done for other self-employed and employed people could surely be done for members of this group.
I urge the Minister, who has told me that he is reflecting on this, not to reflect but to act. After 100 days, where are people going to find work now? They need a solution, and they need support.
Several constituents have said to me, “I will be quite honest with you; I did not need the help. I was not able to get any, but I did not need it.” The Government may have feared that everyone who earned the majority of their income from dividends would suddenly come forward and add a huge burden to the self-employment income support scheme, whereas the reality was that we could have trusted people. Yesterday, Barratt displayed a huge amount of corporate responsibility by saying that it would pay back the money that it had claimed through the furlough scheme. The fact is that a lot of people out there did not need the support, and they might not have come forward and claimed it. Perhaps we should have trusted them a little more and been a bit more flexible with the scheme.
The hon. Gentleman raises an interesting point. One of the issues that I have been looking at in the Public Accounts Committee is the fraud and error in this. I am absolutely in favour of the schemes that have been proposed. I am also keen that the Government come down hard on anyone who has tried to break the rules—I think we agree on that.
It is really important to remember that a lot of these people are not on big incomes—they have absolutely nothing. Because of the high price of housing in London, they are often renting properties, and they are at their wits’ end in how they can manage. This is devastating for them, and these are the people who will be the engine of any economic uplift. We also need to recognise that if we are going to foster this type of economy and working, there needs to be a safety net for people. They did not choose to take this risk. Someone working in broadcasting does not choose to be on a short-term contract; that is just the way the industry works. And do not get me started on the implications of the IR35 reforms. We have had that debate elsewhere, and it is one for another day, but I hope that others in the Chamber agree with me on that.
We need a solution. These people cannot live on fresh air. They cannot keep going on nothing. In many cases, their income will not magically increase in October or anywhere between now and then or next spring, especially if they work in the hospitality sector. I really hope that we will get some answers from the Minister today, and once again, I applaud the work of the Treasury Committee in highlighting these very real issues for many of my constituents.
I begin by referring Members to my declared shareholding in Glint Pay. I thank HMRC for what it has done to put these schemes in place. It is the most extraordinary achievement that it has managed to put in place the coronavirus job retention scheme and the self-employment income support scheme. Normally, such things would take months and years and often be marred by IT failures and delays, and yet HMRC staff have successfully delivered this. I would far rather that they had successfully delivered than failed and left everyone without support. It is the most tremendous achievement, and the staff involved deserve our praise for what they have done, but I think we can see why it normally takes months and possibly years to deliver such schemes, because that time is required to deal with what have become hard edges.
Before I go any further, I would like to put into context the scale of the spending that we are talking about. If we look at page 355 of the estimates, there is £52 billion listed for covid-19. When I look up and down the detailed entries for the Department for Work and Pensions, I can see only one sum that is higher than the covid provisions for HMRC. Rounding to the nearest billion, the figures listed are £33 billion for universal credit inside the welfare cap, £13 billion for personal independence payments, £17 billion for housing benefit inside the welfare cap, just £5 billion for universal credit outside the welfare cap and £102 billion for the state pension outside the welfare cap. To see £52 billion appear in the estimates for HMRC is quite extraordinary, and I will return to that figure in my concluding remarks.
My hon. Friend is making an extremely important point. These are just the main estimates, not the supplementary estimates, and the schemes have been extended and modified since those figures were put together. Does he agree that it would be useful to hear from the Minister what additional funds might be sought through the supplementary estimates?
Yes. I hope that the Minister will give us a detailed explanation of how these figures break down, because the figure to which I just referred is different from the one on the Order Paper. I refer Members to page 357 for the resource to cash reconciliation, which I am sure my right hon. Friend will be fully able to break down in detail if he wishes to.
I want to come on to some of the things that the Chair of the Public Accounts Committee said. In my constituency, there are plenty of people who, in one way or another, work in the arts and are in quite desperate straits. To reinforce her point about tronc, it has been a real disappointment to me that we have not dealt with the issue of people in the hospitality sector receiving perhaps half their income through tips, for which HMRC has PAYE information. I will never forget one particular email from a new father who was shocked to discover that he would be not on 80% of his normal pay but 40%. That is a dramatic difference, and it is because HMRC and the Government have not taken into account tronc payments, which they should. The freelancers issue is important and profound. On dividends and directors, we should recognise that sometimes we are talking about make-up artists, for example, who are paid through dividends.
I am grateful to the hon. Lady for agreeing. There are real issues of justice and equity at stake here. I remember reading my right hon. Friend the Financial Secretary’s 2008 book “Compassionate Economics” and it is a wonderful book that I recommend to anyone. I know that he is a compassionate man and that these issues will weigh upon him, so it is no way a criticism that I raise such things, but I observe that the edges here are awfully hard.
In the estimates document, HMRC refers to its policy partnership with the Treasury, so I encourage HMRC and Ministers to work together to see across the spectrum of issues—I do not have the time to go through them all—in the Treasury Committee’s report to see whether more can be done, even at this late stage, to help those who have been without help altogether. I place particular emphasis on furlough in relation to airlines and workers at airports. Such groups are very much represented in my constituency—west of Heathrow as we are—and people need help there.
My final point, and the reason for declaring my interest, is that the obvious and most dangerous harm from coronavirus is, of course, that it has killed tens of thousands of people, but well down the hierarchy of problems is that it has taught us all to be socialists. All of us have learned to live at one another’s expense, often ultimately at the generosity of the Bank of England and the creation of easy money. I say to Ministers that, yes, it was necessary to do this, but please do get us out of this mess.
The coronavirus pandemic has ushered in an economic emergency of gargantuan proportions. The estimates show that £42 billion will be spent on the coronavirus job retention scheme and £10 billion on the self-employment income support scheme. These are very large numbers, but size is not everything, and questions need to be asked about the effectiveness of the packages the Chancellor has announced. Is this massive resource being spent in the most effective way? Is it being spent fairly? Is it helping those who need it most? Is it creating the optimal conditions for recovery when the pandemic finally recedes? The jury is still out on all those questions.
A lifeboat has been launched in the shape of the furlough scheme and the grants or loans made available as the pandemic took hold. It is a leaky and inadequate lifeboat that has prevented the economy going under completely, but it will all come to nothing unless a proper rescue operation is launched to bring the economy back to safety. The Chancellor must make certain that his economic response does not mirror the Prime Minister’s pre-lockdown dithering and organisational incompetence, which is likely to have cost tens of thousands of lives and exacerbated the economic damage wrought by the pandemic.
The Treasury Committee has published a report that deals with the gaps and unfairnesses in the Government’s schemes. We point out that over a million people have been arbitrarily excluded from the scope of various schemes, even though their livelihoods have been affected by the requirement to lock down and there is no reasonable excuse for leaving them out. As the Federation of Small Businesses pointed out, if those who pay themselves in dividends and who have been excluded from accessing support go out of business, they will take a great many employees on PAYE down with them.
We await the formal Treasury response to the Committee’s detailed points, but when questioned in this place, Ministers tend to boast about the size and cost of the schemes they have introduced without addressing the specific issues.
I want to go back to the point about people who had to use personal service company set-ups in order to get liability insurance. Does my hon. Friend agree that it is a crazy system that led to that behaviour, which in turn has led to people going without money?
I absolutely agree. This crisis has forced us to look at how our labour market works, and we need to come back to that very strongly indeed.
Tomorrow, I want to hear that the Chancellor is doing something to help the freelancers who power much of our cultural industry but who have thus far been excluded from the help available. I want to see him announce a strategic sectoral approach to job retention to ensure that the economy thrives. The OECD estimates that the UK could suffer the worst covid-19 related damage among the advanced economies, with a decline of 11% in national income and UK unemployment rising to 9% this year. Despite the labour market having been sheltered from a complete meltdown by the furlough scheme, there are ominous signs of a huge strain like a dam waiting to burst. The recent announcement of many thousands of job losses in retail, aviation and leisure could be just the tip of the iceberg if the Chancellor does not take decisive action.
The Government must now switch quickly to a more strategic and tailored response that will enable stabilisation and economic recovery. Certain sectors will continue to be affected because of social distancing rules, and they must be helped. Local authorities and schools, for whom the Chancellor promised he would do “whatever it takes” to fight the virus, should have their costs fully reimbursed. To date, they have received back only a third of what they have spent.
The Chancellor exhorting people to spend, spend, spend, as he did at the weekend, risks entrenching the old debt-fuelled consumer economy in place and squandering the chance to lay the foundations of greener, fairer, more sustainable future prosperity. The Prime Minister blaming everyone but himself, exhorting us to “build, build, build” and trumpeting a Roosevelt-like new deal while promising to spend 0.2% of UK GDP, whereas President Roosevelt spent 40% of US GDP, would be a farcical response to our predicament if we were not in such a perilous situation.
I remind the hon. Lady that she stood at the Dispatch Box 10 years ago accusing us of being Hooverite in our liberalism. Although that was historically questionable, it is where she was 10 years ago. Surely she must feel that the references to Roosevelt are an improvement.
Clearly somebody in the Conservative party has moved on, but when we look at the difference between 0.2% of national GDP and 40% of national GDP, we can see that a few lessons are yet to be learned.
Coming back to a point made by my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the labour market is key. Many vulnerable people in the labour market have been left with nothing as a result of the effects of coronavirus. Many in the labour market have also been put at great risk of contracting the virus, and perhaps have to think about a choice between earning and being ill, which is why we need to look more closely at how our labour market is regulated—and crucially, at the 46% cut to the Health and Safety Executive, which enforces labour market rules. The Prime Minister exhorting us to “build, build, build” is all very well, but it would be a farcical response to our predicament if the country were not in such a perilous position; the comparison is ridiculous. The Chancellor and the Prime Minister need to drop the hype and begin to deliver. Our future economic prosperity depends on it.
A few months ago, the Chancellor spoke directly to those who had lost their livelihoods overnight. He said:
“To all those at home right now, anxious about the days ahead, I say this: you will not face this alone.”
Those were reassuring words, and they were backed up by a Government promise to do “whatever it takes” to keep the people of these isles healthy and financially secure. I heard no caveat at that time that included, “unless you are director of your own company”, “unless you are a freelancer” or “unless you are a contractor”.
The warm words do not ring true for those still struggling to keep their head above water. The Trussell Trust reported a staggering 89% rise in the need for emergency food parcels in April, so “whatever it takes” is clearly a lot more than what is being provided. It is not just a few on the periphery of the Chancellor’s vision who are missing out on this vital support. There is a roll call of people who have been forgotten that it would take a pair of blinkers to avoid seeing. Excluded UK estimates that around 3 million are missing out—some 10% of the workforce. Every constituency across the UK will have its own heartbreaking examples of hard-working people who somehow did not qualify for the schemes. These are individuals whose lives have been devastated. They are being let down by a Government who are not meeting their commitment to them. They include the newly self-employed, some of whom left good jobs over a year ago to invest and build their own businesses, but whose income collapsed when covid-19 took root; small limited companies that pay themselves partly through dividends; and freelancers who work multiple jobs.
When someone’s income is the wrong mix of self-employment or short PAYE contracts, neither scheme will help and the computer simply says no. That is the fate of many freelancers in the creative sector, which is so crucial to the economy around the Lothians. Those people do not always make a lot for themselves, but they contribute massively to the communities, our culture and the wider economy.
At the time of the launch of the self-employment income support scheme, the Chancellor said that 95% of those who were majority self-employed would be covered, and that most of those who would not be covered were high earners, but the evidence from countless cases suggests that simply is not the case. There are employees struggling who are not included in the furlough schemes because they picked the wrong time to change their jobs and seasonal workers whose bosses simply did not get the paperwork done in time. UKHospitality told the Treasury Committee that somewhere between 350,000 and 500,000 people in that sector were potentially missing out because they had not had their first payslip before the end of March.
There is growing unease among those who were furloughed that support will start to be tapered before they can build some earnings again and that their job will be on the line, too. We cannot simply shrug our shoulders and say “Too bad, mate”, to all those issues, blaming the complexities of the rules and saying that there are some who may try to bend them. Yes, there are challenges to making the system work, but in an emergency such as this it is the role of Government to put the people first. There is no excuse for missing anyone out.
Now is the time to finesse, improve and extend support for small and medium-sized businesses and freelancers, who will be more than willing to repay the Government’s efforts in their taxes over future years. Withdrawing support at a crucial time would be an economic disaster.
Fairness and equal treatment should be at the heart of action from HMRC, which is why I must mention my great disappointment that the Government refused to review the unfair application of the loan charge and to stop the IR35 tax law changes from pressing ahead. IR35 introduces yet another group of zero-hours employees. The Chancellor has listened to many of these concerns, and I know he has taken steps to resolve some of the issues in the past. I commend him for those efforts, but I urge him not only to keep listening, but to take action.
In this debate on the HMRC estimates, I will focus on the potential economic effect of local lockdowns and the need for a flexible local furlough scheme and wider economic support for affected areas. As has been widely reported, Bradford has had a higher than average rate of infection in recent weeks, but I am pleased to say—the whole House will be pleased to hear this—that it has been coming down. However, the risk of things worsening again is very real.
As a city, Bradford has a higher proportion of people who work in high-risk jobs: as key workers in health and social care, in retail and in the gig economy. Out of 198,000 employees in the district, 75% have never worked from home. These people are sadly at higher risk of catching the virus, but they also need more economic support in the event of a local lockdown. Many of my constituents do not have the luxury of vast savings to fall back on. We are not talking here about decisions on whether to take a holiday, but real dilemmas about how people will feed their families.
The furlough scheme and the self-employed income support scheme need the flexibility to deal with local lockdowns. If people in a certain area are told by Government to stay at home, it is only right that they can be furloughed during that period. That must include people who work in an area under lockdown, as well as those who live there. I urge Ministers to bring forward proposals on that now, before it is too late. We urgently need more information from the Government on how local lockdowns will work and what support and information will be provided.
The local data has been too slow to come to local authorities, and the criteria used to determine whether somewhere should go into or come out of lockdown are unclear. Clearer information from Public Health England and the Department of Health and Social Care on local infection rates would also allow areas to plan their responses. The Government should publish local figures on test and trace, so that we can see where the system is not working as well as it should and take steps to improve it.
Importantly, the Government should take proactive measures to prevent places such as Bradford needing to go into a second lockdown. This might include more funding for the council for public health outreach as well as financial incentives for people to do the right thing. The economic impact of a second lockdown on a local area will be huge. The Government must be clear about what financial support they will provide in these circumstances to protect jobs and livelihoods, and to help with local economic recoveries. A failure to act will cause economic devastation for many and, ultimately, by undermining the public health advice, cost lives.
The Government’s action to save jobs through the job retention scheme was welcome, but there is a growing chorus across this House that too many have fallen through the cracks—the newly employed, the contract workers, the freelancers. This is deeply unfair because these people have been passed over, they have been excluded and they have been abandoned. Of course, whatever system we put in place, this was always going to happen. That is why there should have been a universal system of support for all workers affected. That way, truly no one would have been left behind.
However, there is still time for the Chancellor to put these support mechanisms in place, and we urge him to do so. For example, we urge him to put in place an emergency basic payment to all those who have been left behind. If he does not think that is appropriate or suitable, let us hear his way of dealing with this, because doing nothing is no longer an option. The whole point of the job retention scheme was to save jobs, but if this furlough support is withdrawn too early, on 1 August, and rolled back, it will fail in that goal. The task to save jobs must be completed: it must be allowed to do its job and save tens of thousands of jobs for our constituents.
Of course, the other thing we can do is to convert the loans that businesses have taken out into grants. I petitioned the Chancellor on this very issue in early April, and I am still to receive an answer. The driving force in everything that is done must be about saving jobs and saving our economy. The Bank of England has said that the debt incurred through this crisis must be treated as war debt, and that sounds eminently sensible to me, because in a way this is a war. It has been a war on our health and it has been a war on our economy.
What we need is for the Government to throw every available tool at their disposal at defeating this enemy. We need targeted support for the aviation, tourism and aerospace sector. We need targeted support for our islands, which face a real threat of depopulation. The islands are in a unique position: 300,000 people in the UK live on an island, and they are hit with the double whammy—not just the crippling of our tourism industry, but, as easing takes place, social distancing on the ferries to access islands will create further difficulties for them.
We know that UK Government borrowing will reach £340 billion this year, and quantitative easing will reach £745 billion. Scotland has received a total of £10 billion, but where is the rest of Scotland’s share? What Scotland needs is more effective tools at its disposal to take charge of the situation for ourselves. We need greater powers to deal with this economic tsunami, because that is what it is. It is an economic tsunami, and it is threatening to engulf us, so we need more action, more support for our constituents and more work to save more jobs.
This morning, almost a quarter of all MPs—about 150 of us—joined a Zoom call for the first meeting of the all-party parliamentary group on the 3 million workers who have been excluded from Government schemes.
Like many others in this House, the Minister will be aware that I have been quite persistent in raising the issue of the plight of limited company directors. On 1 May, I tabled a written question with a very specific, concrete proposal from Directors UK, asking the Treasury if it would consider the idea that limited company directors could submit dividend certificates through an online portal linked to HMRC’s self-assessment process. I was pleased when I got the response five days later, because it said that he would be reviewing that proposal.
A further seven days later, the Minister held a call with a number of Members of this House on the launch of the self-employed system, and again, when I raised it, he agreed to look at this specific proposal about the use of dividend certificates. A further five days later, I wrote again to the Minister, following up on that call and gently reminding him that I was looking forward to receiving a response. A further eight days later, in despair, I wrote to the Chancellor asking about the same issue, as well as many others who have been excluded from the schemes.
A further eight days later, on 3 June, we had another phone call when I raised this issue once again, and asked explicitly for a written response on why the dividend certificates idea had not been considered and why we could not get an answer. Much later, on 23 June, I got a response from a Treasury official—it was a response, but not an answer, and said simply that under current reporting mechanisms, it is not possible for HMRC to distinguish between dividends that are derived from an individual’s own company and those from other sources. It went on to state that targeting additional support for those who pay their wages via dividends is much more complex than existing income support schemes. It seems that the Treasury has thrown its hands up in the air and stuck the issue in the “too hard” basket. With all due respect, the Government must do better. It is clear that the Chair of the Treasury Committee, the right hon. Member for Central Devon (Mel Stride), and many other Members agree.
Here we are, with directors of limited companies, new employees and the newly self-employed, all of whom feel utterly abandoned by the Government who have labelled them as “too complicated” to support. That is also having an enormous impact on people’s mental health, and many cannot see a way out. They are spending their life savings, and are worried for their livelihoods and their homes. I have been trying hard for two months to get an answer to the specific, concrete proposal about the use of dividend certificates. I now ask again, for a sixth time, whether we may have an answer to that specific proposal, whether it can be used technically, and, if it cannot, for an explanation as to why it will not work so that Directors UK and others can come back with a new idea.
It is a pleasure to take part in this debate, and I join Members across the House in representing the excluded in the United Kingdom. I am fascinated by the view that those who have chosen to adhere to Government advice and set up limited companies are currently being treated as if they are some sort of Mr Bill Gates. Those who decided to set up such companies are not all a Bill Gates. They were told to do this. Indeed, the advice they were given was to create such an arrangement for financial security, yet they now find that there is no financial security for them. I join other hon. Members in hoping that the Government will address that issue.
The Government must also address the issue of who is self-employed and who is not. They have had the Taylor review for three years but they have sat on it, and far too many people in the economy are directly employed yet designated as self-employed. They are also missing out on Government support, particularly those who, over the past couple of years, have found themselves directly employed and then moved to being self-employed. I hope the Government will consider that area.
I want to offer huge thanks to the HMRC staff who have performed heroics to ensure that companies have been paid through the various support schemes. We have seen the benefits of home working, and many of those employed by HMRC have been working from home and gone the extra mile to ensure that companies are paid. What is the thanks they get? They get a notice from HMRC, notifying them that they could very well find themselves in a redundancy situation. That is an absurdity. HMRC went ahead with its office closure programme, but we have now seen the benefits of home working. Why should someone who has been asked to travel 100 miles to their next workplace be faced with a redundancy notice when this crisis, this pandemic, has proven the benefits of working from home to keep the economic wheels turning? I hope that the Minister will respond to that disgraceful treatment of HMRC staff. Perhaps instead they should be given the reward they deserve, which is an above-inflation interim pay rise, as that is exactly what the civil service deserves in these times.
I want to start by acknowledging the scale of the intervention from the Government with regard to the self-employed support scheme and the job retention scheme, and also to recognise the speed with which they moved to put those in place. But what could have been a universally good and welcome story has been somewhat soured by the gaps that have been identified. I do accept that gaps were inevitable, especially with something that was put in place so quickly: that is not the criticism. Where there is valid criticism is in the fact that many solutions have been put forward over the intervening months, and these have been essentially pushed back without any real consideration of those who have been dismissed. Whenever we write to the Treasury or HMRC, we tend to get the schemes explained back to us when we are actually asking for flexibilities around them. We know the rules around them already—that was not exactly the point.
Many Members have raised concerns about this on the Floor of the House. All the Opposition parties have spoken to the Prime Minister behind the scenes and received warm words but no action. It is important that we pay tribute to groups like ExcludedUK who have been campaigning on this issue. The fact that we now have the all-party parliamentary group on ExcludedUK established under the leadership of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), with 180 Members signed up to it for its first meeting, is an indication of the scale, right across this House, of the concern around these ongoing situations. I am certainly pleased to have become the secretary of that group, and declare that for the record.
The Chair of the Treasury Committee, the right hon. Member for Central Devon (Mel Stride), has outlined the different categories, so there is no need to repeat that, but I do want to pay tribute to the work of the Committee and its report. Some of the gaps that have been identified are around young entrepreneurs and freelancers. They are the future of the economy, and we have a Government who want to encourage entrepreneurship, in theory at the very least. People are offended by being labelled as potential fraud risks. There are also issues around access to finance, given that some of them depend on different types of finance rather than through the traditional banks. There is also an issue emerging around 14 July as the qualifying date for the second phase of the self-employment scheme, which ignores the fact that some people have not been able to work through June but are only now, through the relaxation of the rules, going back into work.
I also want to put on record the issue around Northern Ireland driving licences and the use of Irish passports for registration. While a workaround solution was found in that regard, some people from Northern Ireland have had to jump through more hoops than others, and that reflects some of the problems of putting the Good Friday agreement identity rights into law in the UK as a whole. We need to fix the gaps and extend the future prospects of the key areas of aerospace, tourism and the leisure.
I begin by thanking the Government for the steps that they took at the outset of this pandemic. There are many shops on my high streets and many businesses in my constituency that would have not been open today were it not for the grants and for the staff receiving the furlough. I believe in giving credit, so I give credit to the Minister and to the Government for all the help that they have given. I want the Minister to remember that that is my starting point, because I am not criticising but I want to highlight a number of issues.
With reference to the self-employed income support scheme, my constituent Alan Petticrew ran into difficulties due to the fact that trading profits must be no more than £50,000 and at least equal to non-trading income for 2018-19. Alan’s trading profits were less than that so he received no assistance at all, despite the fact that he had overheads and creditors. The Government can and should make provision for limited company directors. It is not right that anyone who has suffered financially as a result of the public health measures should be left out of support. It is not right for the economic recovery either. The UK relies on an army of limited company directors and freelancers for economic growth. They already face more uncertainty, risks and lower levels of protection than other workers, and the recovery will be slower if they are not about.
The Treasury has done a magnificent job, but ultimately Martin Lewis has summed it up: a number of people have not benefited, including people who have changed jobs, started a business in the past 18 months, been freelance, directors or agency workers, or had an employer who did not really care.
I thank my hon. Friend for her intervention. She is absolutely right. That will be reflected in all our constituencies across the whole of the United Kingdom of Great Britain and Northern Ireland.
My next example is that of our fishing sector. A self-employed fisherman whose average earnings were just above the threshold for the self-employed scheme was not entitled to any financial support from the scheme. The guidelines should have been amended, as the scheme pay-out was capped at £2,500 and seemed discriminatory in that it only offered assistance to the self-employed earning under £50,000. This was also not in line with the PAYE scheme. The Government stated that this affected only a small percentage of people—it is just unfortunate that many of those people happen to be in my constituency and are my constituents. Not everyone who was employed during the tax year 2018-19 but has since become self-employed qualified, so they had no recourse to wages. That was despite being employed and switching to being self-employed. Again, the issues are very clear. Some people’s income through employment was more than their income through self-employment because they decided to become self-employed part of the way through the year 2018-19, and they did not qualify. Again, I believe that is very unfortunate and unfair.
The Chancellor set the date for the furlough scheme at 19 March rather than 31 March, but that excluded thousands of people, like my constituent Carl. Most companies end their financial year on 31 March, and many like Carl take their annual salary then. The date that the Chancellor set excluded my constituent and many others from the scheme. It is more than a case of semantics.
The discretionary aspect of the furlough scheme also led to difficulty with small business employers who were able to keep their shops open. With a third of staff asking to be furloughed, those who owned the shops had to work six days on 18-hour shifts in an attempt to keep their businesses afloat and their staff happy. On the other hand, there were employers—we all know about them—who refused to furlough when companies on mainland UK did. Again, the guidance could have been a wee bit better.
The fact is that we are facing the worst recession in living memory, and brighter and better minds than mine have come up with steps that could be taken. I put forward the suggestion, which has been mooted in the press and elsewhere, of spending vouchers for certain British businesses on my high streets in Newtownards, Comber, Ballynahinch and Saintfield. That would help many businesses and suppliers in the local economy.
I thank the Minister and the Government for what they have done. Please continue sowing, and we will reap the bounce back from the recession much more quickly. If the things that I and others have talked about are done, our businesses will be in a better place.
I want to start with two quotes:
“Everyone in this country has benefited one way or another from what we have been able to do,”
“everyone, no matter where they are, has access to more support than they did before this crisis began.”
The Chancellor’s answer to me this morning have rung very hollow to those who have missed out on the coronavirus job retention scheme and the self-employment income support scheme.
My Twitter timeline is full of people infuriated at being left high and dry by the UK Government. Groups campaigning on this matter include ExcludedUK, New Starter Justice, ForgottenLtd, Forgotten Freelancers, Forgotten PAYE, the maternity petition group, those affected by the £50,000 cliff edge, Women in Film and TV, the Association of Independent Professionals and the Self-Employed, which points out the impact on disabled self-employed workers, the people the hon. Member for Wycombe (Mr Baker) mentioned who are campaigning on tronc, and the Federation of Small Businesses. All those people in all those groups, estimated to number around 3 million, would dispute the Chancellor’s assertion. They have gone for more than 100 days with no income, and there is no prospect of that changing very soon unless the Chancellor acts. As other hon. Members have pointed out, those are ordinary people. During this debate, a taxi driver who lives in my constituency, who has had to live on £380 a month, has been in touch to say that he risks bankruptcy as a result of this. He has bills to pay—he has to pay for his taxi and the rest of his household bills—but has had no income.
I do not dispute that the UK Government’s intervention has been substantial. The right hon. Member for Central Devon (Mel Stride) set out quite well the report that came out of the evidence collected by the Treasury Committee, on which I sit. There are many who have fallen through the gaps. The report states:
“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 job retention scheme—furlough—has kept many people in employment. By choosing to roll it up prematurely, the Government undermine the whole objective. Businesses fold, and people lose their jobs and are pushed on to benefits, if they are eligible for them at all. There has been a disturbing increase in the number of firms making employees redundant in recent weeks, with reports of some businesses exploiting furlough to cover the notice period and cut redundancy payments.
Businesses that have had no income for months cannot take the additional burden of national insurance costs, followed by an increasing proportion of wages. That is particularly true of hospitality, tourism, travel and the cultural sector as a whole. The engineering and manufacturing sector, which may have fulfilled order books but have not been able to bring in new work due to the lockdown, may also be struggling.
Differential lockdown across the nations of the UK, and indeed within them, also poses a problem for the future. As my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) and the hon. Member for Bradford South (Judith Cummins) pointed out, if there is a sudden spike in an area, as there has now been in Leicester, once the coronavirus job retention scheme and SEISS are wound up, families will be placed in an impossible situation.
The furlough scheme must stay in place for as long as it is required.
The design of SEISS has meant that people have faced an arbitrary cut-off, which does not exist in the job retention scheme. There are issues with the design of universal credit: I have had constituents ineligible for support because of their partner’s income or because they have been over the savings limit due to their business savings. An emergency basic payment would plug some of these gaps and help to ensure that people have at least some money coming in.
On further administrative issues with the schemes, I would, first, like to be clear that I do appreciate the strain on the system and the work staff have done, even though, as my hon. Friend the Member for Glasgow South West (Chris Stephens) mentioned, they have also faced job losses. I appreciate the scale of the task, both for Ministers and for HMRC. I would be remiss in my duties, however, if I did not raise concerns about the difficulties that businesses and their employees are facing. Having spoken to businesses in my constituency that are still unable to access the JRS, 11 weeks after it opened, it is clear to me that HMRC has little discretion when it comes to overturning claims, and that this rigidity would appear to be a direct instruction from the Treasury. Businesses have shown me evidence of how HMRC’s mistakes have meant they cannot access the JRS. Often there were delays with uploading real-time information that were not their fault. Online access codes were posted to the wrong place or not at all, and call-backs that were promised never materialised. I should say that HMRC often did not call me back either.
In the case of one business in my constituency, the Sub Club, a much-beloved venue in Glasgow, I asked the Financial Secretary to the Treasury, in an email of 22 June, to use any influence he might have to save a stalwart of Glasgow’s night-time economy. Unfortunately, I am yet to receive an acknowledgement of the email, and the Sub Club had to launch a crowdfunder today to keep going. NY Slice has had perpetual difficulties submitting RTI to HMRC. After much to-ing and fro-ing, a complaints handler advised the business on 21 May that its furlough claim had been rejected and there was no right of appeal. The owner contacted me this morning in utter desperation, as he is now being taken to an employment tribunal by staff who had expected their wages. That could have been avoided had HMRC been more reasonable and more supportive.
Glasgow Guild Antiques and Restoration Ltd and KOHI have also faced issues with the RTI registration, as has the Erskine Bridge hotel, in the constituency of my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), where 73 employees have been left destitute. The incompetence of HMRC, the failure of its internal processes and its refusal to entertain any appeals, even on the basis of its own mistakes, are needlessly pushing businesses across this country to the brink. The Treasury is aware, yet it seems content with that direction of travel. I beg the Minister to look again at those businesses left on the margins, and to do the right thing by these very viable businesses and their employees.
Lastly, I wish to ask the Minister to clarify the report by Martin Lewis that workers will need to pay tax on vital coronavirus tests. That is utter madness and will completely undermine the hard work of businesses, organisations and all UK Governments across these islands that has gotten us to where we are now. A life-saving test is not a “workplace benefit”, and for HMRC to class it as such shows how completely out of touch the Tories are with reality. I ask the Minister to take action on that today.
The job retention scheme and SEISS have been significant. The Chancellor has a choice tomorrow. I ask him to extend the furlough scheme and SEISS for as long as the UK’s four nations require it, so that nobody is left behind.
I am delighted to be taking part in this debate on behalf of the Opposition Front-Bench team, with this being my first time at the Dispatch Box opposite the Financial Secretary. Let me start by thanking the Treasury Committee for its important work in preparation for this debate. This is by no means a run-of-the-mill estimates debate; these are exceptional times, and the schemes put in place by Government, called for and supported by the Opposition and the trade unions, are incomparable to anything we have seen before, with £42 billion for the coronavirus job retention scheme and £10 billion for SEISS.
Since March, communities up and down the country, families, workers, the self-employed, traders and business owners have had their way of life changed beyond recognition. A public health crisis became an economic crisis. The lockdown meant that businesses had to close, work dried up and all but essential parts of the economy came to a standstill. From the beginning, the Government have been too slow: too slow to take the threat seriously; too slow to lock down; and too slow to test, track and isolate. The key aspects of the response required Government to communicate public health messages clearly and to earn public trust for their actions. They have, regrettably, without question, failed on both those measures.
I turn now to the schemes. More than 9 million jobs have been furloughed and more than 2.5 million claims have been made for self-employed income support. Where improvements are needed, we have made suggestions, plugging gaps and ensuring flexibility, and we are still calling on the Government to abandon their one-size-fits-all winding down of these schemes. It was a shame to see the Chancellor dig his heels in on this earlier today. And we are still calling for changes to sick pay so that people are not forced to choose between their health and their income.
There have been problems and missed opportunities with these schemes. All of us will have dealt with the heart-breaking situation of constituents being laid off, despite their employers being eligible for the scheme. The scheme was made available to all employers, but early communication failed to make it clear that firms were expected to furlough staff, not lay them off. New starters were not covered by the scheme. There was a lack of clarity to ensure that employers furloughed staff who needed to shield at home even if businesses continued to function. Agencies, including umbrella agencies, too often chose not to furlough staff, but rather to keep them on their books without work.
We were shocked in the Public Accounts Committee to discover that, despite planning for a pandemic, there had been no planning for what to do with the economy in a pandemic, which rather goes to the point that my hon. Friend was making about the muddled advice and the changes to the scheme as it was being implemented.
I thank my hon. Friend for that intervention. She is absolutely right that far too little preparation was done. We saw that with the stocks of PPE at the beginning of this crisis.
Too many did fall through the gaps. We have heard that it was as many as 3 million, according to ExcludedUK, and upwards of 1 million, according to the Treasury Committee. Perhaps most shamefully, some companies, such as British Airways, have used lockdown and the job retention scheme not to protect jobs, but as cover to plot mass redundancies and drive down the pay, terms and conditions of their workforce. That is a situation that could have been avoided had our Government followed the example of Denmark by making support schemes conditional on jobs being retained. So why did the Chancellor fail to act in the interests of workers? There were also missed opportunities to change corporate tax behaviour, to secure environmental gains, to drive up employment rights and to work with trade unions. It is just plain wrong. Companies that have avoided paying their taxes have received taxpayer bail-outs, with no requirement to change their behaviour, to stop tax avoidance, to stop profit shifting and to stop their use of tax havens. So did the Chancellor fail to act in the interests of taxpayers?
We have called for a full back-to-work Budget, one that is focused on preventing mass unemployment and on creating the jobs of the future, but instead we have an economic update from the Chancellor tomorrow, and we will have to wait to see what comes of that. Some 3.4 million people have already been moved on to universal credit since March and, with lockdown easing, it seems that we have an exit without a strategy.
Let me turn to HMRC itself and where the principle of job retention, it would seem, does not apply. HMRC’s staff numbers have fallen from 105,000 in 2006 to 65,000 in 2019. During those years, the UK cut more revenue collectors than any other European tax authority. Only Greece cut more staff as a proportion of population. The current office closure programme puts a further 2,000 HMRC jobs at risk on top of the more than 900 jobs already cut. One hundred and seventy local tax offices are closing around the UK, leaving 13 regional hubs and four London offices. That will leave no tax office for the south-west closer than Bristol, no tax office in East Anglia at all, and none in Scotland north of Edinburgh and Glasgow, severing the connection with the communities they serve. We oppose the office closures programme. Counter to the Government’s levelling-up narrative, it will see offices closed and jobs lost in towns across the country, from Wrexham to Warrington, Stockton, Dudley, Shipley and Solihull.
Low pay, poor staff retention, high staff turnover and redundancies are all wasting thousands of years of institutional knowledge and expertise at HMRC. It is the incredible work of staff administering the coronavirus schemes that has done so much for people across the country, but it has also meant that key duties elsewhere have had to be suspended. Perhaps our biggest challenge in the coming years will be to restore our public finances and reinstate our tax base, and for that we need HMRC firing on all cylinders.
We know that tax audits bring in at least four times what they cost—£4 to £6 for every £1 spent—and those subject to audits also declare more of their profits in future years. Quite simply, we need tax collectors in order to collect tax. I say sincerely to the Minister that, in the light of the challenges ahead, he should halt the redundancies, stop the office closures and commit to a properly funded and resourced HMRC.
We need the Government to break away from their blanket approach to this crisis. They must look again at sector-specific support beyond October. It can make no sense for viable jobs and sectors simply to be left to collapse, and I implore the Minister to work with trade unions and the TUC to that end. As my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) said, the Government have fostered, and indeed pursued, the growth of a gig economy across this country, and the lack of support for those people has been astounding. We have a crisis of hunger in our communities, with food bank use multiplying and people unable to pay their bills, their rent or their mortgages. The Government must do more for those left unemployed by the coronavirus pandemic.
We are also living through the most incredible demonstration of the value of our public services. There has never been greater urgency to ensure that our tax system is fit for purpose, so that those with the broadest shoulders pay their fair share. Never again can a crisis be heaped on the least well-off and the least able to afford it.
During the last decade of austerity, the richest 1,000 people in the UK increased their wealth by 183%. Aggregate private wealth is now over six times our GDP. We therefore welcome the serious academic research under way on how a UK wealth tax would work. That research is being carried out at the London School of Economics and the Centre for Competitive Advantage in the Global Economy at the University of Warwick, alongside the Institute for Fiscal Studies, the Institute for Government, the OECD and the Resolution Foundation.
In order to sustain funding for universal public services, deliver the coronavirus support schemes and create the sustainable green jobs of the future, we need fair and progressive taxation that confronts growing wealth inequality, to build a just and sustainable economy that puts people, jobs and the planet first.
I thank my right hon. Friend the Member for Central Devon (Mel Stride), who chairs the Treasury Committee, and the Backbench Business Committee for using this estimates day debate to shine a light—in many ways a warm light—on the performance of Her Majesty’s Revenue and Customs during this extraordinarily testing and difficult period. I am grateful to all Members who have contributed to this interesting and lively debate.
I welcome the hon. Member for Liverpool, Walton (Dan Carden) to his first debate as my opposite number, which I hope will be the first of many, although I do think that he slightly missed the tenor of the argument in calling the Government too slow, given that most other Members who have commented have been concerned about the sheer speed of our delivery and whether people might have been missed out in this set of measures.
The coronavirus has the potential to spread with extraordinary speed across a population.
In March, the Government took the unprecedented step of asking businesses and employees to halt their normal activity for an extended and, at that time, indeterminate period of time. At the same time, or shortly afterwards, the Government unveiled an extensive package of support that included a business rates holiday, VAT and income tax deferrals, and Government-backed and guaranteed loans worth £300 billion.
At the heart of that response was, as has been highlighted in the debate, not one but two major schemes that between them covered the vast majority of the working population. As right hon. and hon. Members from all parties have mentioned—my great friend the Member for Wycombe (Mr Baker) in particular highlighted this—had that been done in normal circumstances, it might have taken months or, more likely, years to deliver just one of the schemes, let alone two. My hon. Friend was absolutely right to highlight what an extraordinary achievement it was to bring in both schemes at the speed at which they were introduced. He used the phrase “extraordinary achievement”, and he was right.
It was an achievement, but although there was a planning exercise—there have been many planning exercises for pandemics—the Treasury has told us that in 2016 there was no economic planning for a pandemic. Was the Minister aware of that and does he think that should change?
I have not gone into the arrangements for pandemic that the Treasury had in 2016, at the time the hon. Lady mentions, so I cannot comment on that. What I can say is that when pandemic struck, the two schemes were put in place with astonishing speed and capability. I do not think that is contested in the Chamber; it is well understood.
The coronavirus job retention scheme was announced by the Chancellor on 20 March and opened for applications just one month to the day afterwards. Six days later, the Government announced the self-employment income support scheme, with a target of making the first payments by the middle of June. In fact, the online portal opened for applications on 13 May, weeks ahead of schedule, with the first grants being paid into bank accounts on 25 May and within six days of application thereafter. That was achieved with more than 80% of HMRC staff working from home. Silos disappeared and timelines were condensed to extraordinarily short lengths of time as officials from across Whitehall came together to solve the problems. In so doing, they set up a kind of exemplar of what a really effective 21st century civil service would look like. It is a model that we are looking at very closely in our thinking about how we might change the tax administration system to make it more resilient in response to the concerns.
The achievements I have outlined have been widely welcomed in this debate, and rightly so. There cannot be any Member who has not walked down their local high street in the past week or two and spoken to those at the shops that are reopening who have had the benefit of the furlough scheme, or to traders who have had the benefit of the self-employment scheme. I am massively proud—we should be proud as a House—of HMRC’s efforts to design and deliver the schemes so quickly and with such effect.
The CJRS—the furlough scheme—has helped 1.1 million employers throughout the United Kingdom to furlough 9.3 million jobs, while 2.6 million self-employed individuals have applied for grants worth more than £7.7 billion. As has been said often, I do not pretend today for one moment—I do not think any one of us does—that the schemes are a panacea. Right hon. and hon. Members have rightly highlighted instances of groups and individuals who are very regrettably and unfortunately not eligible under the scheme rules. It is important to say that under no circumstances and at no point have those people been in any way forgotten by the Government; we have listened carefully to Members, as well as to employers, and refined both schemes to include more people where possible. For example, those returning to work after periods of parental leave and reservists who return to their jobs after active service in the armed forces are now able to access the flexible version of the furlough scheme, and similar accommodations have been made with respect to the self-employment scheme.
Together, the measures I have outlined represent an economic intervention unmatched in recent history. Nevertheless, the practicalities are such that the Government have not—I recognise this—been able to support everyone in exactly the way they would want. If I may, I shall address some of the specific points raised in the debate in a moment, but first it is important to understand the principles that guided the Government’s response.
It is not that we wish the Minister to support people in the way that they want. He has to recognise that there are 1 million people who have been given no support at all; we want some consideration for them. Their businesses and livelihoods have been affected because of Government decisions that—understandably, for health reasons—closed down the economy. Will he please address that?
I will be coming to some of the points that the hon. Member raises later in my remarks. We are focusing on the furlough scheme and the self-employment scheme, but of course these schemes have been a small percentage of the overall response, which has included a vast array: £300 billion of loans, tax deferrals, grants, reliefs and the rest of it, as well as support under universal credit and other forms of benefit. It has been a very, very comprehensive system of support, of which we can be proud.
Let me push on. I was talking about the principles involved. The scale and urgency of the crisis were such that the Government’s overwhelming and overriding motivation was to deliver the greatest help to the greatest number of people as quickly as possible. That was the driver behind the schemes. Both were designed to make use of existing processes and verifiable data precisely in order to make the implementation happen in the fastest possible time and to minimise the risk of fraud, error and delay. Any delay would have meant that millions of people who benefited from the schemes would not have received the support when they needed it most.
It has not been possible to extend the self-employment scheme to individuals who became self-employed after 2018-19, because although self-employed taxpayers can file returns for 2019-20, this would have created an opportunity for fraudulent operators and criminals to file fake returns. It does not take an enormous amount of mental mathematics to calculate that a relatively small percentage of additional fraud would equal quite a lot of additional schemes that would have to have been assessed and worked through the system. That is what makes it so difficult. As the House knows, these problems have been highlighted in testimony to the Treasury Committee. It is also important to be clear that these are just two measures within a much larger package of Government support.
I only have one minute left, so let me turn quickly to the points that have been raised. My right hon. Friend the Member for Central Devon raised the question of fairness to individuals. I understand his point. I think he is aware that the schemes are targeted at those who need them most, and the self-employment scheme is most reliant on people’s self-employment income. He has had an explanation of the 95% figure that we have used—that is, those who get more than half their income from self-employment and who could be eligible for the scheme. Of course, many of those people are also entitled to claim other benefits.
The hon. Member for Hackney South and Shoreditch (Meg Hillier) said that it cannot be beyond the wit of the Government to address these issues. Of course, it is true that people have found groups that have been left out, but I put it to her that this has been extraordinarily difficult. We have been able to make changes at the margins but not at the core, precisely in order to deliver the benefits we wanted.
Let me finally say, in response to my hon. Friend the Member for Wycombe, that the OBR has projected some £60 billion in total for the current schemes and £15 billion for supplementary estimates. That may be the order of magnitude that we are talking about. I wish that I could speak for longer.
I will be brief, Madam Deputy Speaker, because I realise that there is another debate to follow. I think that we largely agree across the House about what is working and the fact that the Government have come out with a major programme at considerable pace, which has been laudable. However, that is not the same as saying that everything is perfect or that it cannot be fixed. It seems to me that the Government and the Chancellor have in the past taken an iterative approach to some of these schemes, as the Minister has just been setting out, and our question will be: why can he not take an iterative approach to some of the gaps?
When the head of HMRC appeared before the Treasury Committee, he used an expression to the effect that HMRC has discovered in this process of rolling out these programmes that it has been capable of doing things that it did not think it was capable of doing. I say to HMRC and the Government: let us have that same approach adopted now in respect of the gaps, and let us look after and support those million-plus hard-working people up and down the country who are worthy of it.
Question deferred until Thursday 9 July at Five o’clock (Standing Order No. 54).