Rebecca Long Bailey MP Putting Salford and Eccles First
Millions of people have fallen through the ‘safety net’. Here’s how to help them
Throughout the pandemic, the government has demanded that its citizens give up their liberties and livelihoods in fighting Covid-19, yet it does not stand beside them with sufficient public health and economic support.
This could not have been clearer than during Greater Manchester’s negotiations for tier 3 financial support in October. The sums requested to protect jobs and incomes were nominal compared with the billions that were given to private firms during pandemic, and a mere speck of the £300bn announced in March and June, supposedly to support our economy.
It was therefore nothing short of outrageous that the government confirmed that tier 3 workers facing a new lockdown in Greater Manchester should get only 67% of their pre-crisis income, and that 80% was impossible. And yet, when lockdown became a national venture, it appeared suddenly that 80% was indeed possible.
Alarmingly, the Northern Health Science Alliance recently calculated that Covid-19 has killed proportionately more people in the north than in the rest of England, mainly because of deprivation. Inequality, in-work poverty and job insecurity were all significant problems long before the pandemic, and as a result, many people had turned to self-employment, set up small businesses, or simply existed on pay-as-you-earn zero-hours or short-term contracts. Around 3 million of these people – 10% of the UK workforce – were then excluded from any of the government’s financial support packages.
Over the past few months, I have been contacted by many constituents who are falling through these cracks. One of my constituents is a freelance interior designer for the hospitality industry and works from home. When pubs were asked to close, his contracts for them were cancelled or halted for the foreseeable future. He and his partner have just had a baby. Through the Coronavirus Job Retention Scheme (CJRS), he is now receiving only about 20% of his usual monthly income. As a limited company director, even if he were able to work then he would not be permitted to supplement his claim that way, unlike the Self-Employed Income Support Scheme which allows the self-employed to continue working.
A small hotel owner also contacted me to say he had received the government’s grant, but it was immediately consumed by outstanding bills. He used the furlough scheme, but still had to reduce his staff from five down to two, given the drop in business. The chancellor’s CJRS assumed that staff could continue to work 33% of regular hours during the summer, finally reduced to 20% in the autumn, but this was simply not possible in many industries. UK Hospitality has warned that job losses in this sector could exceed half a million by the end of the year.
A personal trainer who rents her gym space told me that she had been working extra hours to pay off her mortgage and save towards setting up her own studio. She found she was ineligible for support schemes and, because of her savings, also ineligible for universal credit – but she could apply for a loan to help pay off her tax arrears. Little comfort.
These are just a few of the stories I have heard. People who have made ends meet for the last six months by taking payment holidays, asking for help from family, choosing whether or not to take a loan to try to save their business even though they know they may never be able to pay it back, maxing out their overdrafts and credit cards, or worse, avoiding household bill payments. Sometimes they have had to lay off good staff who in the present climate have little chance of securing employment again for a while. Some of these businesses may have made it through the first national lockdown but now, after the second, many of the financial coping strategies people cobbled together have long been exhausted.
The very essence of this issue goes to the heart of what our social security system was created for. I call it the we-will-catch-you-if -you-fall presumption. Like the generations before them, those excluded did what was asked of them: they worked hard, and contributed to their communities and the public purse in good faith that if they ever needed help, they would be protected. Sadly, while the present system has caught some, it has left many people to fall to the very bottom.
The chancellor’s claims of leaving no one behind certainly ring hollow when many of the very people he purports to encourage to kickstart the economy – small-business owners, the self-employed, the hospitality sector – are excluded and left to fall to their knees. He failed to provide any support to them at the outset of this pandemic, he failed to outline any help at the spending review – but nonetheless he still has one card left to play if he is wise enough to use it.
Major supermarkets chains have done very well during the pandemic: Sainsbury’s, Asda, Aldi, Morrisons and Tesco have said they will return the money they received when the UK government announced in March that all shops in England would be exempt from paying business rates this financial year. This alone amounts to about £1.5bn being handed back to the Treasury – the chancellor could now do the right thing and use these funds, as well as unclaimed funds earmarked for furlough, to support those excluded and businesses in sectors badly hit by the pandemic such as hospitality.
If he refuses to take this opportunity, we will wonder if the government’s confused and often contradictory public messaging is not just mere incompetence, but a studied chaos “designed” to blame ordinary people, instead of the party that has been in power for a decade taking responsibility for some of the worst pandemic management in the world.