Rishi Sunak Said Everyone Who Needed Help Would Get It. But Millions Won’t
Written by Huffpost on October 15, 2020
Article Published on Thursday October 15, 2020 11:00 AM by Huffpost
Rishi Sunak Said Everyone Who Needed Help Would Get It. But Millions Won’t
“We will support jobs, we will support incomes, we will support businesses, and we will help you protect your loved ones. We will do whatever it takes.”
Those were Rishi Sunak’s words to the Commons as the UK teetered on the brink of lockdown in mid-March.
But truthfully, there were gaps in the government’s support schemes on day one.
And for the vast majority of workers, these issues haven’t improved. In fact, they’ve got worse – with some people now seven months on from their last payslip.
On top of the existing problems, thousands of people – many of whom were furloughed first time around – are now facing winter having been made redundant in the interim, and forced to find new jobs or apply for Universal Credit (UC).
The government has repeatedly insisted support, in one form or another, is available for anyone who needs it. But as more people fall into financial difficulties and thousands say they’re cut off from help, the situation seems more dire than ever before.
Here’s who will be hit even harder a second time around.
People who would have been furloughed
When the pandemic struck in early 2020, it was clear pretty quickly that some industries would be worst hit than others – with hospitality, travel and domestic tourism all severely impacted as restrictions set in ahead of the summer.
But with a national lockdown on the cards, most people were eligible for the same financial support – with the job retention scheme (aka furlough) available across the board.
The scheme has been tapering off since August, with many employers taking decisions about redundancies at the end of the summer. Soon there will be no support at all for employers who are struggling to retain staff – unless they’re in a local lockdown area.
Figures published in August showed almost 750,000 people in the UK had lost their jobs since the start of the crisis – and that was before furlough 1.0 ended, which had been supporting more than eight million jobs. This time around, a huge group of workers won’t be eligible for any support that resembles what they used to earn.
While furloughed workers received 80% of their usual pay (with many employers also choosing to top this up) up to £2,500 a month between March and August, a significant proportion of those who have since been let go will now be surviving on UC – representing in many cases a significant drop in income. In short, they have no jobs to get furloughed from, even if they’re in an eligible area.
Applying for UC isn’t a simple process, and there are a number of everyday circumstances that have rendered some people who lost their jobs totally ineligible for support.
Research carried out by the Institute for Public Policy Research (IPPR) estimates that just 230,000 jobs will be saved under Sunak’s new scheme as full furlough falls away – with an estimated 1.8m viable jobs jeopardised.
Carsten Jung, IPPR senior economist, said: “It is shocking how narrow the range of workers is who would benefit from the current government schemes. Overall, nine in 10 jobs at risk will not be saved by the schemes, at great and wider economic cost.
“A design change to employment support schemes could save hundreds of thousands of viable jobs and hugely improve value for money. It would target resources at those firms that truly need it rather than paying out money to all firms that used job support schemes at some point – including those that are now doing fine or even profited from the pandemic.”
Thousands of students – particularly those set to take important exams and attend graduation ceremonies – missed out on huge parts of the university experience when the UK went into lockdown.
With campuses closed and courses put on hold, huge numbers of students went home in the hope that, by the time September rolled around, the worst of Covid-19 would have passed.
Amid assurances from universities and government alike that great steps had been taken to make campuses safe, students headed back in their droves to crowded accommodation – only to find most classes still online and virtually all opportunities for socialising forbidden.
Yet these dramatic changes to the university experience haven’t necessarily kept students safe. As of October 9, more than 7,000 students had recently tested positive for Covid-19.
Hundreds of thousands of young people now face months isolated in their student houses and flats, remote lectures, and little prospect of finding casual work to help them pay their way through their studies.
Just weeks into the autumn term, the situation has deteriorated to such an extent that students across the country – backed by the National Union of Students (NUS) – are organising rent strikes in an effort to win rent suspensions or reductions amid huge financial worries.
Back in March the PM’s message was clear: the UK would “get through this together” – an entire nation locked down under the same basic rules.
With Scotland, Wales and Northern Ireland all holding the powers to set their own guidelines, however, it wasn’t long before those one-note rules began to fracture. Soon enough, people living in different parts of the UK were following different rules to one another, and the public health messaging from government became ever more confusing.
After months of fractured local lockdowns, the government has now formalised its strategy – with tiered levels of restrictions coming into force from Wednesday – meaning employees in at-risk sectors such as hospitality in high alert areas are once again facing months without work.
This time, however, the government is only paying out 67% of their salaries up to £2,100 per month – a 16% drop from the 80% promised back in March, with the cap lowered by £400.
Northern leaders have slammed Sunak’s “insufficient” plans, raising concerns that the partial grant will push furloughed employees into poverty.
Speaking at a press conference on Saturday, Liverpool mayor Steve Rotheram said: “If 80% was the right benchmark in March, nothing has changed. If it’s right then, it’s right now,” adding government “can’t do lockdown on the cheap”.
At the start of the crisis, self-employed people who fell into the right criteria of eligibility could claim a taxable grant that covered up to 80% of lost earnings between March and May, to a maximum of £7,500 – broadly the same level of support offered through the furlough scheme for people in employment.
Applications for that grant closed in July, while applications for a second – worth 70% of average monthly trading profits capped at £6,570 in total and covering between June and August – close on Monday.
The level of support had already dropped by 12.5%, but the latest plans represent a far more significant drop in the amount of money self-employed people will be eligible to claim.
An extension, announced in early October, will provide two further grants covering November 2020 to April 2021. So far, so good – but the budget is much tighter this time around.
The treasury will pay out a taxable grant covering just 20% of average monthly trading profits – capped at £1,875 in total – for November to January. A second instalment will take self-employed workers up to the end of April, but the level of support hasn’t even been agreed yet, with the government planning to “set this in due course”.
Workers who’ve been cut off from support since March
Carly Maynard, 31, from Formby, told HuffPost UK she had “fallen through every single possible crack” since the pandemic struck in early 2020.
With a young daughter and struggling to find childcare, she decided to leave her job in retail and set up her own beauty business working from home in August 2019.
But being classed as “newly self-employed” by the time Covid-19 hit, working from home without a dedicated business premises and living with her husband, Maynard was ineligible for the Self-Employed Income Support Scheme (SEISS), support from her local authority, or even Universal Credit.
After losing a baby during pregnancy late in 2019, Maynard was also extremely worried about the impact Covid could have on her and her unborn child after falling pregnant in February – which meant that, as other businesses like hers began to open, she was forced to shield and stay off work.
Maynard used what she had left of her savings to set up a small gymwear business but was ultimately forced to take her maternity allowance months earlier than she had hoped, to help her family stay afloat – meaning she’ll have less time to spend with her newborn.
She said: “We’re really fortunate that my husband has been able to keep working, but we always relied on what I earned to keep the bills paid and everything topped up – and that literally disappeared overnight.
“It’s been devastating – it’s a case of treading water as the bills come in and cutting absolutely everything back. The only other income I get is child support payments, which we’ve had to dip into, which has been one of the most demoralising things I think I’ve ever had to experience in my life.
“To think that £80 that I would love to put aside for my daughter’s future – for her uniform or anything else she needed – has actually been spent on me so we can make sure we’re not in a position where things are being repossessed, is just awful.”
Maynard added that it had been incredibly difficult to watch other business owners in the same industry as her receive support, despite the fact she had paid the same taxes and National Insurance contributions her entire working life.
She said: “It’s important to me not to be bitter about it, but it’s so hard to watch other people who do the same job as me in a completely different financial situation. I’ve paid my taxes the same as everybody else – it feels like I’m paying for a party I haven’t been invited to.
“I am in no dreamland that the government is going to reimburse me for the months I’ve missed out on, but I do think that Rishi Sunak has made a mistake in not creating more of a universal basic income. Everyone who could prove they couldn’t work getting the same amount feels like the only fair way of doing it.
“If I didn’t have the books to prove my income as a self-employed person, why couldn’t they take into account what I earned when I was still in retail? They’ve got a record from HMRC of what I’ve been paid every single year – couldn’t they have looked at that?”
Like thousands of other people who have been cut out of government support, Maynard explained how difficult it had been to see her difficulties brushed aside by government.
She said: “It’s becoming increasingly frustrating seeing MPs raise this whenever the PM is in parliament – and all we hear from him and Rishi is ‘no one has been left out, everyone has access to Universal Credit’.
“I think people have been blinded by that – by lies, really. You look on social media at people sharing their stories and there are so many comments just telling them to apply for Universal Credit. Most people don’t know that to get it you have to meet a certain criteria.”
Anneka Hicks set up Excluded UK back in May, after it became clear that a huge proportion of the workforce had been cut out of government support schemes. An estimated three million people are ineligible for help – a figure the government has disputed – and the non-profit organisation she set up is now 45,000 members strong.
She said: “It’s heartbreaking, to be honest. Over the past seven months many of our members have had to sell their homes, their cars – they’ve depleted their entire life savings.
“They’re predominantly self-employed, so those life savings would have been the equivalent to a pension. Their futures are on the cusp of disappearing.
“They’ve lost their dignity. Many of them have been forced to take state benefits if they can, use food banks to feed their families, lost their businesses, made redundancies. They’re expected to start again with nothing, or less than nothing.”
Some 270 MPs have joined Excluded UK’s campaign and the hardship faced by millions has been repeatedly raised in parliament, with demands for the eligibility for government support schemes to be extended to all UK taxpayers. Despite their work, the government has repeatedly refused to change its position.
But while the group has been campaigning hard for financial support, its efforts have turned more recently to the urgent mental health crisis amongst its members. The past three months, Hicks explained, have been spent fundraising for mental health support and personal development training to help build back confidence in those who had lost everything.
Hicks said: “We are actually at the stage now where we’re providing one-to-one counselling support to our members within 48 hours – whereas the NHS are taking 16 weeks.
“That’s what we’ve had to do based on the urgent demands of our community. We want to help them recover, we want to help them rebuild, but they’re in such dire situations right now that they need all the support they can get – emotionally, mentally and financially.”
What have government said?
At the time of the announcement of the extended support scheme on October 9, Sunak said: “Throughout the crisis the driving force of our economic policy has not changed.
“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.
“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”
The PM has also recently refuted claims that three million people have been cut out of government support, rejecting Green MP Caroline Lucas’ calls on Monday for acknowledgement of those excluded.
He told the Commons: “The self-employed, which is a group that I think we all care about very much, have received so far £13.5bn of support and we’ll continue to look after them as well.
Without going into any further detail on those who had been frozen out of the government’s support schemes he added that the government’s financial support offered to businesses and workers unable to work due to restrictions is “generous by international comparison”.
Johnson said: “In France, it is 60% for some, 70% for others, in Germany it is about the same, in Italy they have an 80% provision but a serious cap, or a very low cap, in Ireland it is down at 60%.
“This is a highly competitive scheme and it is one that I think is generous by international comparison.”