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26 February, 2021 Open access

Select Committee urges Chancellor to address ‘inconsistent, unfair and discriminatory’ approach to supporting employees and self-employed people through Covid crisis

MPs say they are not convinced that the government's reliance on universal credit, discretionary grants, and mortgage and consumer credit holidays is sufficient to plug the gaps in support left by the CJRS and SEISS

The Business, Energy and Industrial Strategy Select Committee has called on the Chancellor to use the Budget next week to address the ‘inconsistent, unfair and discriminatory’ approach to supporting employees and self-employed people through the Covid-19 crisis.

In an interim pre-Budget report on The impact of Coronavirus on businesses and workers, the Committee welcomes the overall level of support offered so far to individuals through the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS). However, it criticises the government for repeatedly choosing not to adapt and refine its support offering to address identified gaps in coverage -

‘It is unacceptable that 11 months into the pandemic approximately 3 million people have fallen through the cracks. Mothers being discriminated against by virtue of having taken parental leave in the last three years is a particularly egregious example of the failure to refine support. We agree with the Treasury Committee (in its Eleventh Report, Economic impact of coronavirus: gaps in support and economic analysis) that the government’s approach to employees and self-employed people has in practice been inconsistent, unfair and discriminatory.’

The Committee also says that the government’s justification for not filling the gaps in support left by the CJRS and SEISS is inadequate -

‘We welcome that many individuals who have not been able to access furlough or SEISS will have had support through universal credit, discretionary grants from local authorities, and mortgage and consumer credit holidays. However, we are disappointed by the government’s suggestion that these are a sufficient replacement for individuals unable to access furlough or SEISS support. The repeated use of the risk of fraud as an adequate justification for not addressing gaps in support for workers is also unconvincing.’

As a result, the Committee makes a number of recommendations including that -

Chair of the Business, Energy and Industrial Strategy Committee Darren Jones said today -

‘The government deserves credit for moving quickly at the start of the pandemic to help protect workers and businesses from the economic fallout caused by the impact of Covid-19.

However, because of eligibility criteria set by the government, alarming gaps in support have arisen. These have unfairly affected certain workers and businesses, including women who have recently taken parental leave. Most significantly, this has had the effect of discriminating between self-employed workers and employed workers. These issues have been raised repeatedly with the government over the past year but are yet to be fixed. In what we will all hope is the last Budget under lockdown, the Chancellor has a final opportunity to get this right.’

For more information, see Chancellor should seek long-term solutions to fire-up business recovery, say MPs from parliament.uk

Update (19 May 2021) - the government has published its response to the Committee's report. Picking up on some of the gaps in the government's long-term proposals to support workers out of the Covid crisis, Committee Chair Darren Jones said today -

'The government has spoken of guaranteeing workers’ rights, curtailing the exploitation of gig-economy workers, and tackling insecure work. Yet a new Employment Bill was nowhere to be seen in last week’s Queen’s Speech. The Plan for Growth and the jobs, skills and training programmes outlined so far are welcome, but their ambition does not match the scale of what is needed and the unemployment challenges we face in our country as we recover from the pandemic.’

For more information, see Impact of Coronavirus on businesses and workers response published from parliament.uk