One million ‘locked out’ of coronavirus economic rescue schemes

More than a million people have fallen through the cracks in the government’s economic rescue package and require urgent support to see them through the pandemic, MPs have warned. Read more: One million ‘locked out’ of coronavirus economic rescue schemes

One million ‘locked out’ of coronavirus economic rescue schemes

More than a million people have fallen through the cracks in the government’s economic rescue package and require urgent support to see them through the pandemic, MPs have warned.

Rishi Sunak is facing calls to “completely fulfil” his promise to do “whatever it takes” to support the economy after MPs concluded that many newly employed staff, self-employed workers, company directors and freelancers have been “locked out” of assistance schemes.

The Treasury select committee estimated that many hundreds of thousands of people have already endured several months of financial hardship “through no fault of their own”.

“If it is to be fair and completely fulfil its promise of doing whatever it takes, the government should urgently enact our recommendations to help those who have fallen through the gaps,” Mel Stride, its chairman, said.

About 8.9 million jobs have been furloughed, with 1.1 million employers lodging claims worth some £19.6 billion under the government’s job retention scheme. Currently this involves the taxpayer providing 80 per cent of furloughed workers’ wages, up to £2,500 per month, but this support will be gradually lowered from August 1.

The income support initiative, which allows self-employed workers to apply for a taxable grant covering 80 per cent of three months’ average trading profits up to £7,500, has so far attracted 2.6 million claims worth £7.5 billion.

However, the Treasury committee identified a number of gaps where people who lost their livelihoods have been unable to access support. It highlighted those recently employed in a job, self-employed workers who started their business in the past year or generate annual trading profits of more than £50,000, and freelancers or staff on short-term contracts in industries such as television and theatre. MPs called on the Treasury to extend the cut-off date for the job retention scheme to March 31, conduct an “urgent review” to figure out how to support newly self-employed workers and remove the “arbitrary” £50,000 cap on profits for the self-employed.

They also said officials “must find a way” to support directors of limited companies who rely on dividends for their income and urged the government to provide freelancers and those on short-term contracts with assistance similar to the furlough scheme.

Mr Stride said that the chancellor had acted “at impressive scale and pace” overall. “However, the committee has identified well over a million people who, through no fault of their own, have lost livelihoods while being locked down and locked out of the main support programmes.”

A Treasury spokeswoman said: “The swift and targeted action we’ve taken has protected millions of jobs and livelihoods and our interventions have been rightly welcomed by the select committee . . . All our support is targeted to make sure we use public funds responsibly, helping those who need it most as quickly as possible, while minimising fraud risk.”

Tax breaks urged for start-up investors
Investors should be given tax breaks to encourage them to invest in start-ups alongside the government through its new Future Fund, the Treasury has been urged (Katherine Griffiths writes).

Without such breaks, early-stage businesses and others that do not qualify for other support could fall through the cracks, a group of businesses have warned in a letter to the chancellor.

The 87 signatories want temporary tax relief similar to the enterprise investment scheme to encourage private investors to match funding provided by the £500 million Future Fund.

The benefit could encourage investors to back businesses that they might otherwise view as too risky. They also believe the scheme should be drawn up so that struggling hospitality and leisure companies would qualify, as in many cases they have been excluded from the business interruption loan scheme.

A Treasury spokeswoman said: “We are continue to engage with stakeholders on our various new support schemes to ensure they are as effective as possible.”

Read more:
One million ‘locked out’ of coronavirus economic rescue schemes

Source : Business Matters More   

What's Your Reaction?

like
0
dislike
0
love
0
funny
0
angry
0
sad
0
wow
0

Next Article

Ikea to repay government furlough payments globally

Ikea has said it is planning to repay salaries paid by governments around the world under furlough schemes. Read more: Ikea to repay government furlough payments globally

Ikea to repay government furlough payments globally

Ikea has said it is planning to repay salaries paid by governments around the world under furlough schemes.

It is set to repay nine governments, including the US and Ireland.

However, it does not include the UK as although the furniture chain furloughed 10,000 UK workers it did not claim back their salaries from the government.

Other firms are also refunding furlough pay, with Games Workshop and the Spectator magazine both saying they will repay the UK government.

Governments across the globe have set up schemes to pay workers who could not do their jobs because of the lockdowns that were designed to control the spread of coronavirus.

In the UK, furloughed workers are being paid 80% of their pay under the Coronavirus Job Retention Scheme.

‘Feeling hopeful’

Ikea said it started the lockdown by paying 90% of wages for workers it furloughed.

In the UK it said: “We furloughed around 10,000 co-workers in the UK. At such an uncertain time, we had initially anticipated putting a number of co-workers on furlough under the job retention scheme. However, we did not claim for or accept any money under the job retention scheme, and we will not be doing so.”

Now that stores are re-opening, it says it does not plan to take any more government money from the countries where it had availed itself of government support: “Although no one knows how things will continue to develop, or what the impact on our business or the economy will be, we are feeling more hopeful and clearer about the decisions we need to take for the future,” Ikea said in a statement.

The countries in which it received support are Belgium, Croatia, the Czech Republic, Ireland, Portugal, Romania, Serbia, Spain and the US, the Financial Times reported.

On Friday, Games Workshop – the company that makes Warhammer toy soldiers – said it would aim to repay furlough money after sales recovered by more than it had expected.

Earlier this month, the Spectator magazine said the financial hit it had suffered during the coronavirus outbreak was not as bad as feared, and that it would repay the funds it had received under the furlough scheme.

Read more:
Ikea to repay government furlough payments globally

Source : Business Matters More   

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.