This report has identified some vulnerable and yet, ineligible, workers and sectors, as well as some actions that can better the situation if taken by British Government.
- Where are we?
Since the start of the pandemic, the UK Government has responded at great pace to support impacted businesses and workers on an unprecedented scale, enabling numerous businesses and workers afloat during lockdowns and those troubled times.
However, around 3 million workers slipped through the net, unable to access financial support.
- Who are those forgotten workers?
Since March 2020, more than 12.2 million workers have benefited from the furlough and Self-employment Income Support scheme (SEISS). But there are some areas of weakness in the provided financial support creating a gap between workers and contribute to weaken some sectors.
Self-employed workers having their profits exceeding £50 000 -disadvantaged compared to PAYE workers-, freelancers and those with short-term contracts are denied from the furlough and SEISS’ support. This can be explained by the Government’s fear of fraud and error and by their mixed economy of earnings.
Other categories happened to fall through the gap. SEISS’s calculating system discriminates against mothers who have taken their maternity leave in the last three years. Finally, company directors with income accrued via dividends rather than through the PAYE tax system are also ineligible for support.
- and sectors?
Not all sectors of activity are equal either. Those excluded from the support are disproportionately represented in arts and recreation, for example, leading to long-term damage due to the loss of skills.
Moreover, if the actions of the Government and British Business Bank have been appreciated and vital for some sectors such as retail, tourism and hospitality, other affected sectors (automotive, aerospace, aviation, arts, health, beauty, and wellbeing) have been disadvantaged by not receiving any comparable targeted support. Other sectors, highly impacted by the crisis, have been unfairly excluded from Government support as they were not legally forced to close.
There is also poor targeting: a gap has been opened between financed large retailers, able to adapt and small businesses, relying much more on the physical presence of customers. This is an issue as some corporations refuse to return unutilised funds, seen as a commercial opportunity.
The lack of tailored support, the (often low) level of communication with businesses (such as the late timing of some announcements) and the uncertainly about the future have worsened the situation.
- Moving forward
The situation obviously creates some long-term issues affecting both businesses and workers. The government has shown an unprecedented level of responsiveness, but It fails to present long-term solutions (eg. the commercial rent obligations). The tricky question is how and when to remove those measures without further increasing unemployment – which is already a long-term challenge- or economic recovery. The lack of preparation and communication from the government toward business is also a major handicap for their rebound such as the abandon of the Coronavirus Job Retention Bonus that left a hole in some businesses ‘finances.
for all these reasons, the committee calls on the government to maintain its measures and above all, to provide a long-term, tailored action and communication plan. Short-term reactivity is no longer to be prescribed: they must focus on the future and recovery.
Find the whole report : click here.