Renters will be protected from eviction under new legislation but could still go heavily into arrears as a result of Covid-19. Charities and unions want the government to do more
Unions and campaign groups have urged the government to do more to protect millions of tenants, businesses and workers from the impact of the coronavirus, as major gaps emerged in the chancellor’s £350bn economic rescue plans.
Rishi Sunak unveiled an unprecedented package of government-backed business loans and grants – equivalent to 15 per cent of GDP – on Tuesday, but there was little evidence of help for some of the most vulnerable groups in society.
Significant number of workers, particularly those in the gig economy or on flexible contracts, are likely to see a big drop in income. This risks compounding Britain’s problems by further reducing economic activity which has already been badly hit by social distancing measures.
Many employees who self-isolate due to the coronavirus will have to get by on one of the lowest rates of statutory sick pay (SSP) in Europe – just £94.25 per week. Only 30 per cent of employers pay more than the statutory minimum, according to the business secretary Alok Sharma.
prime minister refused to say whether he would follow other European countries in increasing SSP. However, he did say that no one would be penalised for staying at home to avoid catching or spreading Covid-19. Details of how he will meet this pledge have not yet been forthcoming.
The chancellor said many more details of the government’s support plans will emerge after talks with company bosses and unions. Some key questions remain unanswered.
Government action is required to protect millions of jobs that are at risk if economic activity declines as sharply as it is expected to. As people stay home and cut back on shopping, eating out and meeting up, certain sectors are feeling the brunt.
Lay-offs and cuts to hours have already started in the hospitality sector which has warned many businesses will not be able to pay staff within weeks.
Rishi Sunak announced £330bn of government-backed business loans and £20bn of tax breaks and grants but business groups have warned this still may not be enough to stop mass job losses.
Business secretary Alok Sharma refused to say on Wednesday whether the government would provide funds to help pay wages.
Self-employed people and those on zero-hours contracts face particularly acute problems and some have already seen their work reduced and incomes fall.
The chancellor has said that people ineligible for SSP, such as the self-employed, will be able to claim employment and support allowance (ESA) from the first day they are out of work, rather than the eighth day, as was previously the case. However, ESA is just £73.10 per week, or £57.90 for people aged under 25. That is not enough for most people to live on.
Zero-hours contract workers can claim SSP if they earn more than £118 per week. If they earn less they may be able to claim unemployment benefits.
Many gig economy workers are facing big declines in income as they are paid per job rather than a set wage. As less people go out, taxi drivers will earn much less, for example.
Some gig economy firms such as Deliveroo have set up hardship funds for their riders but there are problems here too.
Some riders have reported that they aren’t able to access the fund because they require a sick note, which they cant obtain because people with coronavirus symptoms or who are self-isolating are told not to go to the doctor.
The government announced in the Budget last week that people could get confirmation of their illness through the NHS 111 helpline but Deliveroo says the government has not actually made this available yet, leaving some riders with no income and no access to the hardship fund.
The Independent Workers’ Union of Great Britain is demanding gig economy companies grant workers full sick pay without preconditions.
Following sustained pressure from the Labour Party, the government announced emergency legislation on Wednesday to ensure that renters are not evicted as a result of being unable to pay rent because of the pandemic.
However, this still means people unable to work may fall into arrears through no fault of their own.
Benefit charity Turn2Us is calling for the government to increase universal credit payments to help cover rent costs while Jeremy Corbyn wants the government to suspend rent payments during the pandemic.
Labour leadership candidate Rebecca Long-Bailey has called for a universal basic income – an unconditional payment made to every citizen – to help people, including renters.
Given that the chancellor announced a three-month mortgage holiday for anyone struggling to make repayments because of Covid-19 he will remain under pressure to give renters equal leeway.