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Support for people excluded from COVID-19 measures

Volume 689: debated on Monday 22 February 2021

The petition of residents of the constituency of North Ayrshire and Arran,

Declares that there is urgent concern for around three million people who have been completely overlooked by the UK Government’s support package for the covid-19 pandemic; further declares that it is alarming that, despite the Chancellor’s recent response to changing circumstances, his Winter Economic Plan continues to exclude people who already could not access the Government’s financial support; further that it is an injustice to the millions of workers who have been thrown into hardship that the Government promised that “no one would be left behind”; further that the Government’s commitment that it would not stop trying to find ways to support people and businesses now sounds hollow in the ears of the three million people—the self-employed, freelance workers, the newly employed as of March this year and the limited company directors—who are excluded from any and all support and are now in their eighth month with no financial assistance; and further that there is deep concern that, despite repeated arguments that the gaps in support are addressed, the UK Government has still failed to address this injustice.

The petitioners therefore request that the House of Commons urge the Government to bring forward additional measures to support the three million who have been unfairly excluded from UK Government support.

And the petitioners remain, etc.—[Presented by Patricia Gibson, Official Report, 1 December 2020; Vol. 685, c. 268.]

[P002632]

Observations from the Financial Secretary to the Treasury (Jesse Norman):

In response to the pandemic, the Government have provided a wide-ranging economic package that is recognised as one of the most generous in the world, taking unprecedented steps to support families, businesses and the most vulnerable. This package includes support for employees through the Coronavirus Job Retention Scheme (CJRS), and for self-employed people through the Self- Employment Income Support Scheme (SEISS).

So far, the CJRS has helped 1.2 million employers across the UK to furlough 9.9 million jobs. The scheme is scheduled to run until the end of April 2021. The Government have received over £18.5 billion of claims so far across the first three SEISS grants. Further details of the fourth SEISS grant, to cover February to April 2021, will be set out in due course.

In designing and delivering these schemes, the Government prioritised delivering support to as many people as possible, as quickly as possible, while guarding against the risk of fraud or abuse. This meant making difficult decisions, and the Government recognise that some of the eligibility criteria and conditions, necessary to ensure that these schemes work for the vast majority, have meant that some people did not qualify.

Bringing these people into the schemes would have required an unacceptable level of risk of fraud and error. But overall, as the National Audit Office has acknowledged, the Government were right to introduce the SEISS and CJRS, which have been successful in helping to protect the livelihoods of millions of people.

Those ineligible for the CJRS or SEISS may still be eligible for other elements of the wider £280 billion support package available. The Government have introduced a range of additional welfare measures to provide further support to those who rely on the welfare system, injecting an additional £7.4 billion, including a £20 per week increase in the 2020-21 Universal Credit standard allowance and the suspension of the Universal Credit Minimum Income Floor for self-employed people on low incomes until the end of April 2021.

The Government have also increased the Local Housing Allowance rates for Universal Credit and Housing Benefit claimants so that they cover the lowest 30th percentile of local rents. This increase means nearly £1 billion of additional support for private renters claiming Universal Credit or Housing Benefit in 2020-21, and means over 1.5 million households will gain an average of £600, including those in work. The Government have confirmed that Local Housing Allowance rates will be maintained at the same cash level in 2021-22 in order to ensure that claimants continue to benefit from this increase.

In addition, a number of loan schemes are open for businesses seeking liquidity until the end of March 2021, including the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. These have provided over £68 billion in guaranteed loans, and sit alongside VAT cuts for businesses in hospitality and tourism, business rates holidays for eligible businesses across the retail, hospitality and leisure sectors, as well as nurseries, and billions of pounds in tax deferrals, rate reliefs, and other labour market schemes for businesses facing reduced demand.

The Government have also introduced the Local Restrictions Support Grant (LRSG) (Closed), giving businesses forced to close due to national or local restrictions up to £3,000 per month. This was worth over £1 billion for the four weeks of national lockdown in November and will benefit over 600,000 business premises. In addition, these businesses will benefit from one-off grants of up to £9,000 as announced on 5 January. Similarly, where local areas are subject to enhanced restrictions on socialising, in particular a ban on indoor household mixing, LAs will receive funding that enables them to make grants to hospitality, leisure, and accommodation businesses worth up to £2,100 per month.

Businesses that are not eligible for the grants for closed businesses may be able to benefit from funding from the Additional Restrictions Grant. The Government recently increased the funding available under this scheme to £1.6 billion across England. It is up to each local authority to determine eligibility for this scheme based on their assessment of local economic need; the Government encourage local authorities to support businesses which have been impacted by covid-19 restrictions, but which are ineligible for the other grant schemes.

Finally, to give the devolved administrations the certainty to plan and deliver their coronavirus response, the Government have guaranteed that they will receive at least £16.8 billion in additional funding this year, on top of the support announced at spring Budget 2020. This means at least £8.6 billion of additional funding for the Scottish Government, £5.2 billion for the Welsh Government, and £3.0 billion for the Northern Ireland Executive.

These policy responses are carefully designed to complement each other, and provide certainty and support to individuals and businesses across the UK. The Government continue to take a flexible approach and keep impacts and policies under review. That is exactly why they have extended the schemes, to support businesses and jobs over the coming months and prepare them for the inclusive recovery we all want to see.

During this difficult time the Treasury will continue to work closely with employers, delivery partners, industry groups and other Government Departments in order to understand and address the long-term effects of covid-19 and the challenges it poses to the wider economy.