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Millions ‘falling through the gaps’ of coronavirus support, MPs warn

Money - Image credit: PA

Millions ‘falling through the gaps’ of coronavirus support, MPs warn

Over a million people are facing financial hardship amid the coronavirus pandemic because of “critical gaps” in government support, MPs have warned.

In a new report, the Westminster Treasury Select Committee calls on ministers to tweak existing schemes or come up with new support measures for those who have been worst-hit by the economic effects of COVID-19.

That includes the newly employed or self-employed, freelancers, those on short-term contracts, and those who earn above the cut-off rate for self-employed support.

Committee chair Conservative MP Mel Stride said: “The Chancellor has said that he will do whatever it takes to support people and businesses from the economic impact of the pandemic.

“Overall, he has acted at impressive scale and pace.

"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.

“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.”

There have been over 2.3 million claims to the Self-Employment Income Support Scheme since its launch, while 8.4 million jobs have been furloughed under the Coronavirus Job Retention Scheme.

Self-employed people will only receive one more grant under the scheme, while government grants for the job retention scheme are set to be gradually reduced from August.

Union and think tanks have warned that, despite these measures, many people risk losing the livelihoods due to the crisis. 

According to the Treasury Committee report, half a million people typically start a new job each month, meaning there are potentially hundreds of thousands of people who started their current role before the cut-off date for each scheme. 

They also estimated that around 700,000 individuals who are directors of limited companies, and who take most of their earnings in dividends, may be ineligible for support.

And a further 225,000 self-employed people who earn just above £50,000 – the earning limit for government grants – could be disproportionately affected, the report suggests.

The report comes ahead of what are expected to be record-breaking unemployment figures this week, and after it was revealed Britain’s economy took an unprecedented hit in April, the first full month of lockdown restrictions. 

Official figures released by the Office for National Statistics last week showed that GDP fell by 20.4 per cent in April compared to March.

That marked the largest monthly fall since records began in 1997, with the ONS saying it reflected “record widespread falls in services, production and construction output”.

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