Chancellor says he cannot do more to help those excluded from taxpayer support

Rishi Sunak
Chancellor Rishi Sunak has announced billions in support, but has not been able to help everybody struggling due to the coronavirus crisis. Credit: HMT

We are all in the same storm, we are not all in the same boat.

The government has made borderline heroic efforts to protect the income of those affected by the lockdown of parts of the economy. 

In the darkest of times, the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS) has been the difference between hope and despair, but in some cases money has reached those who didn’t need it and in some cases it has failed to reach those who did.  

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The Treasury Select Committee estimates around one million people slipped between the cracks of the various emergency schemes - that’s a very significant minority.

Last month MPs urged the chancellor to find ways of extending financial help retrospectively.

Rushi Sunak had another think and decided that he can’t.

To extend the cut-off date for the CJRS beyond March 19 is impossible, due to “the practical implications of monitoring such an extension”. Doing so would “significantly increase the risk of abuse”.

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To allow the newly self-employed to submit accounts for 2019/20, and thereby qualify for cash SEISS grants of up to £2,500 a month, “creates an opportunity for an individual or an organised criminal gang to file fake or misleading returns”.

To allow those earning more than £50,000 a year to qualify for SEISS grants “would not be right.”

The Treasury repeats its view that 95% of the self-employed fall within that qualification threshold. It claims that the average total income of those who don’t was £200,000 last year.

To allow directors of limited companies, who take their wages in the form of dividends, to qualify for SEISS runs “a high risk that incorrect or fraudulent payments could not be recovered, ultimately at a cost to the taxpayer”.

One million excluded from Government's income support schemes, figures show

And do it goes on. The chancellor rejects all of the recommended changes MPs made last month.

He points out that between them CJRS and SEISS have supported 9.4 million jobs and 2.7 million self-employed people. He has done what he can, it is time to move on.

“Now we have to look forward,” Sunak told the Treasury Select Committee last week.

“There wouldn’t now be the opportunity or intention to introduce new schemes, the decisions that we made were difficult, but they were decisions that we made that I think were the right ones and our focus now is on planning for the recovery, protecting jobs.”

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The government’s income support schemes had to be scrambled together and deployed in haste.

There were bound to be design flaws, rough justice was inevitable. 

But there are blatant unfairnesses and it’s easy to see why they stick in the throat of those who find themselves excluded.

As MPs point out, a household with two furloughed workers with a combined income of £100,000 a year and savings of £500,000 have received £5,000 a month from the taxpayer.

A self-employed earner on £50,500 received nothing.

The chancellor wants to move on. This issue won’t go away. For those who have struggled for four months without taxpayer support, the injustice burns too brightly.