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Moved by Lord Clement-Jones
5: After Clause 84, insert the following new Clause—“Statutory self-employment pay(1) The Secretary of State must, by regulations made by statutory instrument, introduce a scheme of statutory self-employment pay for those whose work has been impacted as a result of the coronavirus.(2) The scheme must make provision for payments to be made out of public funds to individuals who are—(a) self-employed, or(b) freelancers.(3) Regulations made under subsection (1) may define the meanings of “self-employed” and “freelancers” in subsection (2).(4) The payments to be made under subsection (2) are to be set such that the gross monthly earnings of an individual specified in subsection (2) do not fall below—(a) 80 per cent of their gross monthly earnings, averaged over the previous 3 years (or if records do not date back 3 years, the monthly net earnings averaged for the period records are available), or(b) £2,500,whichever is lower.(5) No payment made under subsection (2) shall exceed £2,500 per month.(6) Regulations made under subsection (1) may provide that payments made under subsection (2) must be paid back via self-assessment if the payments were made in error.(7) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”Member’s explanatory statementThis amendment would ensure that the Government introduced a scheme of statutory self-employment pay.
My Lords, my right honourable friend Ed Davey prompted an important statement from the Chief Secretary to the Treasury yesterday. In doing so, he acknowledged the way the Chancellor and the Treasury have given support to businesses and employees so far, but emphasised that this will remain incomplete and inadequate until we see proper measures for the 5 million self-employed across the country who are excluded from current financial support for businesses and employees.
That is the motive behind this amendment, which seeks to replicate the Government’s support scheme for those in employment, both in the 80% of gross monthly earnings and in reference to their average earnings over the past three years, with a cap of £2,500. As my old friend Munira Wilson said when introducing a similar amendment in the Commons,
“5 million self-employed and freelancers feel that they have been completely overlooked.”—[
They are under real stress as a result of the coronavirus crisis. Freelancers and the self-employed are deeply worried, and the rather confused messages coming out of government about when they should go to work do not help.
In his response to my right honourable friend Ed Davey’s Question, the Chief Secretary to the Treasury, Stephen Barclay, used the phrase “further help is coming”. But while we all understand that there are complications, the Government must move as fast as possible to meet these people’s concerns, because in many cases they are simply running out of money. As my right honourable friend said,
“80% of the 5 million self-employed are sole traders. They are our neighbours, our friends, our family. The vast majority are not wealthy people. They are cleaners, taxi drivers, plumbers, hairdressers; they are musicians, tutors, journalists; and they are builders, electricians and child minders.”—[
Most of the self-employed have very modest incomes and are not well off. The majority have taxable incomes of less than £10,000 a year, compared with just 15% of employees on incomes that low. Without help, they will not be able to pay their mortgages, rent and bills, and will face financial ruin.
As the Minister may know, I have a particularly strong connection with the creative sector. Freelance work and self-employment is the predominant pattern in the sector. For instance, 73% of those working in the music industry are freelance. A Creative Industries Federation survey last week revealed that 60% of creative freelancers estimate that their income will more than halve in 2020 due to the coronavirus outbreak and that almost 50% of freelancers who responded to the poll had already had 100% of their work cancelled. They, along with 50 creative bodies, Equity, the MU and the Writers’ Guild, have called for an emergency fund that gives a time-limited and carefully targeted cash grant to the self-employed workers and freelancers who need it most.
Other European countries have put in place similar schemes; Norway, for example, has guaranteed temporary income protection for 80% of average self-employed earnings from the past three years, with an annual cap of the equivalent of £45,000. So have France, Belgium and Denmark. An urgent package of help is needed now, which needs to be at least the equivalent of that which has been offered to employees. As I said yesterday in relation to journalists, but it applies across the board for the self-employed and freelancers, they may be forced to ignore government guidance to stay home and plough on with what work is available or face real hardship.
In closing, I was surprised, when I asked the Labour Front Bench to support and sign this amendment yesterday, to be told that it was not a priority in light of the time available for discussion on the Bill. I am glad that they have now changed their tune, especially given the helpful statements of the Mayor of London and John McDonnell yesterday. I urge the Government to be generous and conscious of the necessary urgency in their response. I beg to move.
My Lords, I put my name to this amendment, because I too am about the need for economic support for the self-employed, freelancers and workers on zero-hour contracts. Yesterday, the noble Earl, Lord Courtown, told the House that compensation for these people must be part of a package that is comprehensive, co-ordinated and coherent. However, he was not prepared to put a timetable to that announcement.
As the noble Lord, Lord Clement-Jones, just said, this amendment will give support straightaway to the 5 million self-employed workers, four-fifths of whom fall below the £2,500 a month threshold suggested in subsection (4)(b) of the proposed new clause, which is about the medium wage. It would be in line with the job retention package for employees announced last Friday.
However, I cannot emphasise enough that the scheme needs to be enacted very quickly. Failure to do so is threatening the lives of workers and those they serve. The great fear is that many self-employed workers have to decide between self-isolating and having no money coming into the house. That is particularly so in the care sector. I talked to a support worker on a zero-hours contract at a private residential home in Somerset run by a charitable trust. At best, she works two 15-hour night shifts a week for minimum wage. Together with her husband’s state pension, it is hardly enough to cover her rent and food bills as it is. Her husband is in bad health and vulnerable to the virus. Eventually, after some soul-searching, she decided that in the present crisis she could not threaten his health by continuing to go to work and has gone into self-isolation.
That support worker has done the right thing, even though she will now start running up debts that could take a long time to pay off. But this is a very real dilemma for many lowly paid self-employed people and workers on zero-hours contracts. There are real fears in the care industry that some workers who look after some of the most vulnerable people in this country will ignore any symptoms of the virus and continue going to work because they cannot afford not to. As a country, we cannot take that risk. I urge the Minister to accept the amendment. If he is not prepared to do so, at least will he tell the House when the Chancellor will come forward with a package of help for the self-employed, freelancers and workers on zero-hours contracts? Time is of the essence.
My Lords, the proposals that the noble Lord, Lord Clement-Jones, has put forward commend themselves to the House. Essentially, he proposes that the Danish system be introduced here. The Resolution Foundation published a paper this morning that applies considerable expertise and global knowledge to this issue and proposes something similar.
I slightly regretted that the noble Lord made party-political points towards the end, because I do not believe that there is any party-political difference on this at all. We are all looking to the Government—indeed, many Conservatives take the same view. I hope that we can address all these things as a House together and not make party points on them.
However, my concern about this amendment is exactly the same as on the previous one. What we are talking about here is one of the most important decisions that the Government will take in dealing with this crisis. The noble Viscount was completely right about the social impact; 5 million gig workers in the economy, all of whom are self-employed but have been dependent on income from services that have been reasonably predictable in their provision, face their livelihoods being decimated at the moment. Unless provisions of this kind are put in place, they will face serious hardship. Unless a Statement is made today by the Chancellor, Parliament will not have the slightest impact on what is proposed, because we will have no opportunity to question Ministers about it—neither the Chancellor in the other place or Ministers in this place—and we will not get to give any views on this issue again until, I understand,
That is not satisfactory. These issues are costing billions of pounds to the taxpayer and will have a huge social impact, but Parliament will be entirely irrelevant to the discussion and the announcement of those proposals. I therefore hope that the noble Earl can give us some indication of how Parliament will be involved in both the announcement and the assessment of the package in respect of the self-employed when it is made. It is not satisfactory that we will play no part in this for another month.
My Lords, the noble Lord, Lord Adonis, asked for a cross-party view so I will make a brief intervention. The economic and moral case for doing something for this group of people is unarguable. No one in this House or in the other place disagrees with that. Their needs are just as great as of those who have the good fortune to have employed jobs, and it is on all of us to make sure that we have a solution.
If it was possible to do what is in the amendment, it could have been done already. There are technical and potentially moral hazard issues why this specific amendment might not be right. I do not stand in judgment; I just know that there are technical issues, and I know that there is a great deal of sympathy for this kind of solution. However, I know that the Treasury has been looking at this and other solutions and that it has its concerns. However, the most important thing is not to agree today on the specific line-by-line items of a package. Exactly as noble Lords have said, this is about getting a sense from my noble friend about when this package of equal weight and power will happen.
There are economic and moral reasons for doing this but health reasons too. If you are young, financially insecure or both of those things, you are highly likely to be at the very wrong end of the economic consequences, but you are also likely to look at it and think, “I might not get this disease and I’m almost certainly not going to die of it, so I’ll take my chances. I need to pay the rent”—or whatever it is. We simply cannot all be in this together if we have created a system which creates perverse incentives for certain groups. My noble friend knows that I am saying this with support for him and for the Government, but it is incumbent on us all to solve this so that we can act in unison to make sure that we deal with this health crisis together.
I add my support by saying that those words from the noble Lord, Lord O’Shaughnessy, were very wise. On the people that we have addressed so far and who have been talked about publicly, I reinforce that it is quite right that we should seek, in whatever way we can, to provide the support that has just been described. However, there is a group that falls between those who have already been assisted in support to companies and the purely self-employed: the worker working for themselves in our economy.
There is a group of entrepreneurs, many of them with start-ups and some with continuing businesses, who cannot access what is on offer to those in slightly different circumstances because of this. If they are using serviced premises—I will give an example in this House in a second—and therefore do not pay business rates, they are not entitled to the help that is already been granted on business rates or the grants that have been put in place, all of which are extremely welcome. In addition to what we describe as the self-employed there is therefore a group of people with very small microbusinesses.
The hairdresser’s in the Palace of Westminster—I make no declaration other than that I use it—is not unique but is a good example of someone running a small business which employs people but which cannot draw down on the help currently available for the reasons I have just described. It does not pay business rates in this building, and those with serviced premises that they rent do not pay them either. I hope that the noble Earl will be able to take back to his colleagues that there is this little additional gap that we should not have to come back to and say, “We forgot about those.” I am sure that is not the case but I just want to reinforce it.
My Lords, I support the amendment and I stress, as others have, the extreme urgency in this. The noble Viscount, Lord Colville, told us a very moving story about a situation involving an older worker, but I invite the Committee to think about the situation of many young people, who are disproportionately represented in the gig economy in these sorts of roles.
In London and many other cities, young people live in shared households. There may be four, five or six people, each with one bedroom, probably not even with a living room, because what was once a living room is now a bedroom. What happens in that household when most people cannot pay the rent? What strains will there be in that household as people struggle to get by, with the most basic cooking facilities and the smallest amount of space? One can imagine the difficulties such people will be in. They need to be rescued, to know that they have security now, and that will give stability and certainty.
As many other noble Lords have stressed, this would ensure that that person would not have to continue to operate as a courier for food travelling around the country—I am trying not to mention a brand name—or as a care worker or in any other of the roles they might be fulfilling. This is in the interests of everybody’s health, but also in the interests of people who do not have, as some in this situation will, the bank of mum and dad to rely on. It is those young people who do not have the bank of mum and dad that we really have to help.
My Lords, I add my support to the amendment, particularly on behalf of those who work for small satellite TV channels and ethnic minority newspapers. I have been inundated with hundreds of calls, particularly from journalists who work in this massive, £5 million industry as self-employed freelancers and who feel absolute fear and hopelessness about how they are going to manage in the lockdown. Many satellite channels rely on advertising which is now going to dry up, if it has not already. Newspapers are not being sold, so I want to add their concerns to our consideration of this amendment. I hope the Minister and the Government will look seriously at the Norway model, as the noble Lord, Lord Adonis, has suggested.
The Minister said earlier that we are looking into global procurement: I think we should look also at the global procurement of ideas to ensure that our people are served wherever they are working.
My Lords, this has been another short but important debate and I absolutely agree with my noble friend Lord Adonis; first, about the Resolution Foundation paper that came out this morning, but also on his point about the 5 million gig workers. The noble Lord, Lord O’Shaughnessy, made absolutely the right point: it is absolutely not in our interest for these people not to have enough to live on and to feel that they have to go out to work, even if they are ill and they will infect people, because otherwise they will not be able to pay their rent. We are very pleased to support this amendment—indeed, we always would have supported it.
I shall make just two points. One is about financial support. I really think we need to know when the Chancellor is going to announce what further support can be provided, not only for those who are self-employed, which is very urgent, but measures to improve access to sick pay and deal with the issues of assisting millions of people through the universal credit scheme by increasing it, suspending sanctions and scrapping the five-week wait for a first payment. Those things are absolutely urgent and important.
The other point I take this opportunity to raise is about renters. I looked at the Bill again last night after having said that I thought the three-month pause on evictions was not adequate to protect people who rent because it would defer a crisis only to the end of the period, when landlords will demand total arrears payments for three months’ rent. The Minister said that of course this could be renewed and turned into six months, but actually the Bill does not say that, so I seek reassurance. This is linked to income support because the people we are talking about are exactly the people who will not be able to pay their rent.
In the event of that, we need to be sure that individuals and families will not get served with eviction notices. Some people will have been given their eviction notices prior to this legislation, and the Government need to take account of that. Those people should not be evicted because they may have been given a month’s notice two weeks ago and they may find themselves evicted right in the middle of the worst point of this crisis.
My final point is about people in shared ownership, which is part of what the noble Baroness behind me said: when you have people with shared ownership, that is an issue. In the housing association world, people with shared ownership apportion their outgoings partly to their mortgage and partly to rent to the housing association. Many housing associations have put up rent from April as a result of the freeze on rent increases being lifted, so how will these tenants and owners be protected in terms of the rent element of those costs? I do not necessarily expect the Minister to be able to answer that question right now, but there are hundreds of thousands of people in the housing association world who will also need our protection.
I will get straight to the point. The first thing that I ask the Committee to do is recognise the nature and scale of what the Government have done so far to protect the jobs and incomes of millions of people. The package of measures that we have already announced is unprecedented and is one of the most generous business and welfare packages by any Government so far in response to Covid-19. In the context of those measures, which have been broadly welcomed, the Government absolutely acknowledge the calls for more to be done in relation to the self-employed. I completely agree with what noble Lords have said about the vital role played by the self-employed in our economy and our national life. We have always said that we would go further where we could, and I can tell the Committee that we are actively considering further steps, which I will come back to.
We have already improved the welfare safety net to ensure that self-employed people and freelancers are better protected. We are temporarily relaxing the minimum income floor for all self-employed universal credit claimants affected by the economic impact of Covid-19 from
Freelancers and the self-employed will also benefit from the changes announced to the benefits system such as the £20 increase in the universal credit standard allowance, which will mean that claimants are better off by £1,040 a year and will benefit from the increases to the local housing allowance. I add that we are already making sure that benefits are easily accessible and more supportive for those who need to make a claim. Other changes announced by my right honourable friend the Chancellor, such as deferring income tax self-assessment payments due in July 2020, are designed to help self-employed people and freelancers through this period.
My right honourable friend the Chancellor has stated that he is committed to going further to support individuals and businesses, and will provide a further update on support for the self-employed in the coming days. That is an assurance that I can give today. I have taken full note of the careful way in which the amendment has been drafted and the points articulated by noble Lords in support of it; they have been well and truly registered. An amendment to the Bill is not required for the Chancellor to provide further support for the self-employed, support that I emphasise is already planned and due to be announced shortly.
I emphasise again that everything is being done to ensure that everyone is supported to do the right thing for the good of us all. It would be wonderful for everyone if I were able to go further today, and the noble Lord, Lord Clement-Jones, will understand why I cannot, but I hope I have provided sufficient reassurance to enable him to feel comfortable in withdrawing the amendment.
Will agency staff be included in any thoughts that the Government are having about those who might be assisted but who are currently not covered? Many care workers and many people working in offices even here in London are supplied by agencies which do not consider themselves to be their employers but to be facilitators and mediators in creating opportunities to work. They are not able to claim those workers as people for whom they can have the special 80% arrangement. Might such employees be covered by the Government’s thoughts?
The noble Baroness makes a very good point and one that I was familiar with in my previous role as a Health Minister. She is absolutely right: agency workers form a key part of the health and social care network and in other areas of our economy. I can assure her that they will not be overlooked.
My Lords, as the noble Lord rightly said, Parliament will not be able to debate any package of measures for the self-employed which my right honourable friend may announce until it returns on
Absolutely. That is what I indicated that parliamentarians, including your Lordships, would be able to do once we return from the Easter Recess. I suggest that, at that point, it is not too late to influence the Government in any announcement that may or may not have been made.
Government figures say that there have been 477,000 new universal credit claims in the past nine days, and social media is full of accounts of some 30,000 or 40,000 people being in the queue just to apply. What steps will be taken to ensure that everyone can get access to the provisions to which the Minister has referred?
I am aware that self-employed claimants will not be required to attend a jobcentre; universal credit can be claimed online or via the telephone. Self-employed people who are unable to work because they are directly affected by Covid-19 or are self-isolating will also be eligible for contributory employment and support allowance. As announced in the Budget, this is now payable from the first day of sickness rather than the eighth. I recognise that we are likely to see a wave of applications and that the system can cope with only a certain number at a time, but I am aware that the system has been geared up to expect that wave. I can only assure the noble Baroness that the officials and civil servants involved in this process are as keen as anyone else not to let anyone in need go without.
Those applying by making calls rather than going online are at the mercy of whoever answers the phone—if they are able to get through. While they are trying to apply there is a possibility that, because the system is so overwhelmed, they will not be able to get through to put their claims in. What happens to them? They are at home and not able to go to work because they are following the Government’s guidelines, but there is a possibility of them not getting through. In the meantime, their family is suffering. With all the will in the world, not everybody will get through. The Government need to bear that in mind when they say that they have things in place.
The noble Baroness makes a very important point. She may be aware of instances where the system has broken down, and of course that is very regrettable. I hope that those affected will be able to bring that to the attention of the Department for Work and Pensions. We can only do what we can do. I say again that the willingness to ensure that the system works is most definitely there.
I am in danger of being a pain here, but could the noble Earl acknowledge that he understood the point I was trying to make about micro-businesses? If they employ somebody, they may be able to draw down on the £2,500 per month assistance, which is very welcome. But if the business itself goes bust because it cannot draw down on the generous help that is available to larger businesses with rateable value, then those employees will not have a job to come back to.
I fully acknowledge the noble Lord’s point. I refer him to the various measures that my right honourable friend announced for businesses generally, but in particular for small and medium-sized businesses. They are more vulnerable generally than larger businesses. The job retention scheme was specifically designed to address this situation, as he rightly said, as were mortgage holidays. The business interruption loan scheme is available to small businesses, particularly on finance facilities up to £5 million. That will enable more businesses to access the finance they need to assist cash flow. If it proves necessary for my right honourable friend to look at further measures, I have no doubt that he will do so.
Like the noble Lord, Lord Blunkett, I regret if I too am being something of a nuisance, but I recognise that this amendment seeks to deal with gaps, where people being short of funds would then create greater risks for others. I want the Government to keep in mind that this is our last chance for several weeks to talk about this because of the Easter break. I am seizing the moment to say in this House that there are people who have no recourse to public funds: asylum seekers. The Government should suspend the relevant policy immediately, so that people who face hardship, who have no recourse to public funds, who are often living in cramped circumstances and who are perhaps most vulnerable to the virus have opportunities to access funds.
All I can do is assure the noble Baroness that the points she has made will be taken back to the department and considered.
My Lords, I too regret another intervention, but how will people know what is going on if they are number 30,000 in the queue? How will they communicate with the Government or the necessary department? What are the Government doing to ensure that they communicate to these people how they should react and respond? Is everything being done that can be? Maybe some of those working in the gig economy who have nothing to do will be asked to join some of these telephone contact centres as paid employees. That might be of additional assistance to the Government.
My Lords, as the noble Baroness knows, there are various avenues for individuals to utilise. One might be contacting their local Citizens Advice to enable it to make representations. They can contact their Member of Parliament to enable him or her to make representations on their behalf. They are not without the means to communicate if something does not work as it should.
My Lords, this has been an extremely valuable debate. All sides of the House have demonstrated how important support for freelancers and the self-employed is. The Minister will know that he commands quite a lot of confidence in this House, so we take him at his word when he gives us an assurance, as he has, that the Chancellor of the Exchequer is determined to bring in a scheme that is workable and for precisely this cohort of people—5 million freelance and self-employed people. He has given an important assurance because, as the noble Lord, Lord Adonis, pointed out, we will not have the ability to question Ministers and Members in the Commons will not have the ability to question the Chancellor on the nature of any scheme. In a sense, we have it on trust that something will be done in the coming days. As the noble Viscount, Lord Colville, said, time is of the essence; indeed, “urgent” has been used across the House.
The noble Lord, Lord Adonis, also referred to the Resolution Foundation. Torsten Bell’s interview on the “Today” programme this morning set out a clearly workable scheme along the lines that Norway, Denmark and so on have already introduced, so is it any wonder that there is frustration across at the House with the speed at which the Government are acting in this area? I take entirely the Minister’s point that the nature and scale of what has been done so far is quite extraordinary —one is not trying to minimise that—but this is the next step that must be taken extremely quickly.
The noble Baroness, Lady Thornton, pointed out the issue of eviction and other noble Lords have pointed out problems with universal credit, not least concerning means testing, capital assets and so on. None of those mechanisms will fit the bill for freelancers and the self-employed so I urge the Government to move on this with all speed, otherwise they will let down a significant proportion of our working population. I beg leave to withdraw the amendment.
Amendment 5 withdrawn.