I am working to collate the concerns of people in Bristol West and put them to the relevant ministers. Below is a letter to the Chancellor of the Exchequer, requesting that he consider some of the people and businesses currently falling between the announced support schemes:
The Rt Hon Rishi Sunak MP
Chancellor of the Exchequer
The Correspondence & Enquiry unit
1 Horse Guards Road
CC: Rt Hon Dr Thérèse Coffey MP, Secretary of State for Work and Pensions
30 March 2020
Re: Support for individuals and businesses in my constituency currently falling between gaps
First of all, I hope you are well. Never has that hope seemed more genuine and less of a cliché. I’d like you to pass on my gratitude to your teams as I’m sure they are working flat out.
I’ve been heartened by the recent announcements of government support packages for business and I’m pleased to say that many of my local self-employed people and businesses, large and small, are also pleased at how way government is helping those who would otherwise be thriving.
However, there are of course some gaps and I’m writing to you today about people and businesses who fall into them. I shared the aim of not wanting the perfect to be the enemy of the good but now the schemes have been announced it’s possible to identify these gaps and how they connect to hard-working people in Bristol West.
I want to work with the government constructively to help my local self-employed people, freelancers and businesses to succeed. Please let me know if you can consider any or all of the below requests and if so, what assistance you need from me to make these suggestions work.
The many innovative people and businesses in my constituency provide good quality jobs and contribute a lot to the economy, in many different ways. I want them to be able to keep going as we will need them to re-build the economy after this crisis is over.
1. Healthcare providers left out of the scheme
I have been contacted by a number of healthcare providers who are left out of support provision. This includes NHS doctors with no private surgery and dentists’ surgeries who are partially funded by the NHS. Many of these people are confused as to whether they are able to access the job retention scheme or are eligible for business rates relief. I want them to be able to retain economic viability as we will need them to be operational during and beyond the crisis.
Would you consider ensuring that these organisations are eligible for business rates relief and can access the job retention scheme if companies are only partially funded by NHS?
2. People in the creative and other industries who work on a series of short-term PAYE contracts
It is common for TV camera crew members, costume designers and many others across the creative industries to be employed on a series of short-term PAYE contracts. This is also common in other industries.
Many of them found the work grinding to a halt in February as the production companies realised what was ahead. This means the end-point of their contracts came before the February 28th cut-off point for the employer to be able to claim from the Job Retention Scheme (JRS) but they are otherwise equivalent to employees or self-employed people. This is a group of people who have worked hard, contributed greatly to the economy and in my constituency represents a sizeable proportion of the population. The knock-on effects on other parts of the economy could be significant.
Can you consider giving specific assistance for people who are usually continuously employed but on a series of PAYE contracts and therefore do not qualify for either scheme?
3. Businesses which do not have a rateable value
Any grant or loan which relies on a rateable value automatically excludes those which do not pay rates by virtue of the arrangement on which they rent their business premises or operate. For example, my own constituency office is in a shared building in which there are many previously thriving businesses. Rates are paid by the building management company, so none of the businesses pay rates directly and cannot claim grants.
This particularly affects small businesses in serviced offices and co-working spaces. This is a particular problem for small companies in the creative and digital industries, often in the early stages when life is precarious enough. Nonetheless, there is often a good business model underpinning these businesses.
Please find a way to include businesses with no rateable value or rate rebate in the system of grants and loans.
4. Businesses which pay business rates, not classified as retail, hospitality or leisure businesses (but linked to these sectors)
Those who heavily rely on these most-affected sectors but do not fit into these categories are falling through the gaps. These include manufacturers paying business rates who supply those in the retail, hospitality or leisure sector, such as breweries. Such companies are facing the same problems of loss of revenue but are not receiving the same support.
Please extend support mechanisms to businesses who directly rely on supplying the retail, hospitality or leisure sectors.
5. Company directors
Company directors are finding that they are stuck between different systems and unable to claim any support at all. Again, many of the companies are very small, sometimes just one or two people. This model is particularly prevalent in the creative industries. The information on the government COVID-19 pages on support for self-employed people says: “If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.” But there was no further information on the page indicated.
I’m very concerned about the people who are in this position in my patch. Thanks to other support mechanisms, they may be able to keep paying their employees but may be unable to pay their own bills.
I am aware of several cases in my constituency, including the owner of a small shop, the director of a local building firm and the director of an activity centre. These are not highly paid. Loss of income for these individuals could lead to the company folding and a further loss of jobs.
What assistance are you providing for company directors who are usually on an income below the Self-employment Income Support Scheme (SEISS) threshold of £50,000?
6. People who have only recently become self-employed
I recognise the difficulties in coming up with a scheme which provides support for people who need it and does not lay itself open to scammers.
However, I have been in communication with several constituents who do not have three years of tax returns as self-employed people. In some cases, they were employed and were then persuaded to become self-employed to carry on the same work; in other cases they recently became self-employed following redundancy or other life changes (for which they have documentation).
Often these people have sunk all their savings or redundancy into their self-employment or have started to employ other people as fledgling businesses. These people are caught as they are too long out of salaried employment to be covered by the Job Retention Scheme and not yet long enough in self-employment to qualify for the SEISS. Many have evidence to prove they are legitimately self-employed, including signed rental agreements or purchased supplies.
What assistance can you provide and what guidance can you suggest for people who are only recently self-employed but can demonstrate that this self-employment is genuine?
7. Mothers who are self-employed and have taken maternity leave in the last three years
Several self-employed women tell me they stand to lose out as they have had a baby during the last three years, i.e. the period for ascertaining average earnings. Some have been self-employed for many years, with considerable accounts to demonstrate their true earnings prior to taking time off or reducing their hours to have a baby.
What assistance can you provide and what advice can you give to women whose recent average earnings have been temporarily reduced by a period of maternity leave?
8. People who are a mixture of employed and self-employed
Some people have a fluctuating mixture of employment and self-employment from year to year and this is leading to a real risk of hardship when people cannot access the schemes already announced.
Some constituents are usually majority self-employed and have accounts for many years to demonstrate this but have recently taken on short-term PAYE contracts. The terms of these contracts mean they will be excluded from JRS but are not eligible for the SEISS as they were majority employed for this year. Others are finding that the date of the short-term PAYE contract has left them unable to ask an employer to claim from the JRS but their self-employed work has dried up. They would be best-off claiming on SEISS so that they can continue to work self-employed.
Please can you find a way to sort out the anomalies so that people who live off a mixture of employment on PAYE and genuine self-employment are able to claim?
9. The cut-off of £50,000 for SEISS
Some self-employed people have contacted me about this as they feel that this is not equivalent to the employment support scheme. I understand the argument the Chancellor has made about the different circumstances of self-employed people. However, we should consider that these people do not have paid holiday or sick leave or many of the other benefits which employed people have and often they were persuaded to go self-employed by their previous employer as a way of saving on these other costs.
A cliff-edge at £50,000 will be mean that many self-employed people in my patch, often in the digital, IT or creative industries we need to keep our economy growing, will not be able to meet their bills and rent/mortgage and will really struggle to maintain their skills and equipment needed for them to get going again after this is over.
Can you consider a tapering arrangement for the SEISS for self-employed people with profits over £50,000?
10. Individuals who are missing out on the furlough scheme because their current employment began after 28th February 2020
Finally, constituents who recently started a new job but now face the losing their jobs because of lack of work tell me their employers feel they have no choice as they cannot claim from the JRS for employees who started work after 28/2. I understand the need to have some cut-off point to help prevent fraud but these are people whose employer employed them before the JRS was announced.
Given that the announcement of the JRS was on the 20th March, please can you consider allowing employers to claim under the JRS for people who were employed up to the 20th March?
I’d appreciate a response to the above suggestions as soon as possible, as a number of my constituents are really struggling and seriously worried about how they are going to manage.
I hope you understand that in the absence of Parliament and the associated opportunities to raise concerns and offer suggestions to government, writing a long letter like this feels like the only option I have to fight for my local jobs, economy and businesses.
Take care in these difficult times.
Thangam Debbonaire, MP for Bristol West