Chancellor Rishi Sunak visits a JobCentre

View from Manchester: Looking forward - to some common sense

Image credit: HM Treasury

The Chancellor is still rejecting calls to help workers outside the government’s Covid-19 income support schemes. He’s got this one very badly wrong.

At Wednesday’s (July 15) Commons Treasury Select Committee hearing, Conservative MP Steve Baker invited Chancellor Rishi Sunak to acknowledge that he was “drawing a line” under efforts to provide support for those not covered by the UK government’s Covid-19 income support schemes. To all intents and purposes, Sunak did so.

“I’m not looking forward to the emails,” said an obviously disappointed Baker.

Estimates vary as to how many people have fallen through what the respected financial journalist Martin Lewis has called “cracks that have become fissures”. The committee puts the number at more than one million and has called for government action. Groups lobbying for those shut out – such as #ForgottenLtd, Excluded UK and New Starter Justice – put that number at closer to three million, roughly 10 per cent of the working population.

It can be hard for those of us who have either been able to work through the crisis or been placed on the Chancellor’s furlough scheme to appreciate the scale of the problem.

The excluded fall into many categories, and while the number in each might seem comparatively small, add them all together and you get the scary numbers cited earlier.

They include the recently self-employed, those who moved into new jobs after the end of February, those on short-term PAYE contracts, and company directors paid mostly in dividends. Those are just four of the buckets. A surprisingly wide range of criteria applies.

For engineering specifically, the widely held assumption that much of the sector has been able to shift to homeworking using digital tools can also lead you to underestimate the scale of the problem.

For example, many independent technology consultants have jobs that still require site visits (though some jobs, not all, were covered by exclusions to the lockdown) or have found that new security rules that address greater remote working exclude those who are not staff.

But most of all, as in so many sectors, many in our world have seen work dry up.

Since March, I have talked to many of those who have been left out. The only conclusions one can reach are disturbing.

A sense of irritation and bemusement has been replaced by blistering anger and resentment – and in far too many cases deepening depression. As mortgage holidays and moratoriums on rent and other bills come to an end, many see their futures and livelihoods crumbling away, and are feeling their mental health decline sharply. A good number have also suffered close friends and family falling prey to this ghastly virus.

It has to be said that the Chancellor has handled this particular challenge very badly, for all the good he has done elsewhere. He has advanced a number of reasons for his failure to act but they are all problematic.

Controversially, he initially cited the risk of fraud. This did not merely infuriate the excluded but caused them to point out – quite reasonably – that in most cases the government holds existing salary and dividend records against which claims could be assessed and checked. There is also evidence that those who have qualified for aid have worked while supposedly furloughed.

More recently, his department has advanced “significant administrative complexity”. Well, yes, these things are hard but that does not mean they aren't doable – and, well, it’s a pandemic, stupid. Beyond that, the comment has been seen as bordering on sophistry given it comes from the government department that probably deals more than any other with complexity. And you can probably imagine how well excuses about that go down with an excluded engineer (yup, eight letters of language that is not appropriate for use here).

The latest line, offered by Sunak at the Select Committee meeting, is that the government is focused on “looking forward”. In this context, this soundbite unfortunately evokes a hit-and-run driver.

That then brings us to image generally. For the Chancellor to plead complexity and then make his most recent public acts a series of grinning photo-ops giving thumbs-up to toasters, serving noodles and slapping up store signage has been tonally cack-handed. While one can entirely see the need to encourage consumer spending, it is bewildering that no one saw how that strategy would compound offence already taken by a sizeable chunk of the population. At a certain point, spin becomes antic.

We can debate the speed of the overall government response to Covid-19 all we like; Sunak was quick out of the gate with his initial Coronavirus Job Retention Scheme (CJRS), though it took him a while longer to get the Self-Employment Income Support Scheme (SEISS). More than £35bn has so far been claimed against the two (CJRS: £28.7bn; SEISS: £7.8bn).

This was indeed generous, but it was still the case that it saw – albeit understandably - the Treasury being used as a blunt instrument during the early stages of a rapidly evolving pandemic. The failure to apply any nuance to addressing the gaps since then is mystifying. Especially as its social, public health and economic implications become ever more apparent.

But don’t just take my word for that. Next week, I’d like to introduce you to some people who have fallen through these fissures. Their stories are generally illustrative and won’t make for easy reading. But they show that if the Chancellor does genuinely plan to look forward, he should not ignore the additional obstacles earlier exclusions are setting on the road ahead. After all, it is one we all must travel.

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