Liberal Democrats

F4: Supporting Business, Workers and the Self-Employed during the COVID-19 Pandemic

14 members

Mover: Christine Jardine MP (Spokesperson for the Economy).

Summation: Sarah Olney MP (Spokesperson for Business and Trade).

As passed by conference

 

Conference believes that:

  1. We must leave no one behind as we tackle this pandemic, and build a fairer, greener, more regionally balanced economy as we emerge from it.
  2. The continuing waves of infection from the COVID-19 pandemic and the resulting restrictions make it imperative that the Government continues to support businesses – especially small businesses.
  3. To protect jobs, the country needs a long-term strategy that stretches through the whole of 2021; last-minute, knee-jerk responses are unnecessarily harming the economy.
  4. To support the recovery, we need to empower people to develop new skills so that they can thrive in the technologies and industries that are key to the UK’s economic future.

Conference notes with concern that:

  1. The COVID-19 pandemic caused the UK’s GDP to shrink by 11% in 2020 – the biggest economic hit our country has suffered since before the invention of the steam engine.
  2. The Government has caused enormous uncertainty for both employers and workers with last-minute announcements, short-term sticking plasters and frequent U-turns: for example, the Chancellor resisted calls to extend the Coronavirus Job Retention Scheme (CJRS) beyond October 2020 until the day it was set to expire; he then made three separate announcements extending it – first to December 2020, then to March 2021 and finally to April.
  3. Despite the CJRS, the UK lost more than 900,000 jobs between March and September 2020, and 370,000 people were made redundant in August to October alone.
  4. Certain groups of people have been impacted particularly badly by this economic crisis, including women, Black, Asian and minority ethnic people and young workers.
  5. Certain sectors have been impacted particularly badly, including hospitality, tourism, charities and the creative industries.
  6. An estimated 3 million people were excluded from the Government’s income support schemes; in particular, the Government has excluded from the Self-Employment Income Support Scheme (SEISS):
    1. Self-employed workers operating as limited companies.
    2. Self-employed workers earning more than 50% of their income from employment.
    3. Self-employed workers with profits over £50,000.
  7. Ending the CJRS and SEISS prematurely would risk mass unemployment.
  8. Unemployment will hamper economic growth, bring down tax receipts, add pressure to the welfare state and hurt the UK’s economic recovery.
  9. At just £95.85 a week, Statutory Sick Pay is not enough for claimants to survive on.
  10. This crisis has greatly increased the debt burden on many small businesses: research by the Federation of Small Businesses found that 34% have increased their levels of debt, and 40% of businesses in debt now describe it as “unmanageable”.
  11. The use of regional lockdowns means that some parts of the country will be worse-affected than others, while regions dependent on sectors such as tourism will also face particular challenges. In many cases, this will exacerbate pre-existing regional inequalities.
  12. The number of people starting apprenticeships in England had already fallen before COVID-19 hit – from 500,000 in 2014–15 to 393,000 in 2018–19 – and it has plummeted further during the pandemic: just 54,000 people started apprenticeships between April and July 2020, compared to 102,000 in the same period of 2019.
  13. Fraudsters have exploited the Government’s COVID-19 support schemes, but HMRC does not yet know the scale of this fraud: its planning assumption was that total fraud and error in the CJRS would be 5 to 10%, equating to between £2.3bn and £4.6bn by December 2020.

Conference reaffirms the Liberal Democrat commitments to:

  1. Ensure a green recovery, with a focus on reskilling existing workers and those left unemployed by the pandemic so they can participate fully in the transition to a zero-carbon economy.
  2. Expand higher vocational training, including by transforming the broken Apprenticeship Levy into a wider ‘Skills and Training Levy’ and developing National Colleges as national centres of expertise for key sectors, such as renewable energy.
  3. Develop a COVID-19 Race Equality Strategy, to form part of a new Social and Race Equality Contract.
  4. Establish a £50 billion capital rebalancing fund allocated to and administered by devolved authorities to address the historic investment disparities between our nations and regions, as adopted in policy paper 136, Fairer Share For All (2019).

Conference further calls on the Government to:

  1. Immediately extend the CJRS and the SEISS until at least the end of December 2021 for all sectors of the economy, with provisions for flexible furlough arrangements.
  2. Fix the SEISS by extending it to cover the self-employed people who are currently excluded.
  3. Establish dedicated support schemes for the worst-affected sectors, such as hospitality, tourism, charities and the creative industries.
  4. Develop a long-term economic strategy, setting out how the UK will invest in new industries, jobs and training, that will create a fairer, greener, more regionally balanced economy after the pandemic.
  5. Establish and resource regional investment funds, allocated to and administered by devolved authorities, to enable targeted investments in rebuilding local economies, with particular emphasis on support to small and medium sized businesses.
  6. Use the extension of the CJRS and SEISS to facilitate the transition to a new greener economy.
  7. Legally require companies that use the CJRS to demonstrate they are offering equal pay for equal work and treating women fairly and equally in terms of restructuring, recruitment, retention and promotion.
  8. Increase Statutory Sick Pay to the equivalent of two-thirds of the National Living Wage (currently £220 per week), and extend it to the 2 million workers who are currently excluded because they earn less than £120 a week.
  9. Provide more support to small businesses struggling with cash flow and debt, including by:
    1. Extending business rates relief, VAT reductions and tax deferrals to avoid a potential cliff-edge.
  10. Do more to tackle fraud and error in the CJRS and other COVID-19 support schemes, and to recoup taxpayers’ money that has been paid to fraudsters.

 

Applicability: Federal; except xi) (lines 56–60), B. (lines 70–73), and 8 a) (lines 99–100), which are England only.

 

 

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