MP calls for measures to fill gaps in job retention scheme
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MP for Gordon, Richard Thomson, is calling for the Chancellor to find urgent solutions to the gaps in the 'furlough' scheme, which have left families across the north-east struggling without financial support during the Coronavirus pandemic.
The Coronavirus Job Retention Scheme - in which the Government pays 80 per cent of salary for those unable to work - has seen a number of changes since it was first announced, with amendments being made to include employee commission payments as well as to the scheme qualifying date.
While Mr Thomson has welcomed the recent extension of the furlough until October, he remains critical of a scheme which he describes as being 'overly complex' and 'suffering from major gaps'.
Commenting on the situation, Mr Thomson said: “The furlough scheme is welcome but it's still missing the mark for far too many people who need help right now.
“It is overly complex and still suffering from major gaps, such as excluding people who were in employment as of March 19 but not yet registered by their new employers with HMRC.
"Although the Chancellor is allowing people's former employers to 're-hire' them for the purposes of making a claim, for various reasons not every employer is willing to do that.
"It puts all the power in the hands of former employers, who can decide whether or not they wish to help people who have recently left their employment.
"Letting people who have a contractual start date of March 19 or earlier would solve that at a stroke, especially where there is a poor relationship with a former boss.
"There are other issues, such as the fact it misses out seasonal workers and small company directors who are paid through dividends.
"There's also a looming problem for people on fixed term contracts which are coming to an end in the lockdown.
“A Universal Basic Income would have avoided this complexity precisely because it would have been paid to everyone who needed it.
"Instead, too far many people are still being denied support through no fault of their own because they fall through the many cracks in the scheme.
“These are problems which the UK Government is fully aware of, as they have been raised directly with Ministers by myself and colleagues many times.”
One woman affected is Lauren Mackinlay from Blackburn.
She has been left without support having handed in her notice two weeks prior to the lockdown being enforced.
Her then-employer, G1, furloughed her in her position as food and beverage manager, but only until the date she had submitted her notice for.
As her new job is also in the restaurant industry she was unable to start and was therefore left without employment or support.
To stay afloat and pay for her new home, she has taken up a role in a food shop in the meantime.
Miss Mackinlay said: “I feel a lot of people have slipped through the cracks in the system and it seems pretty unfair.
"From G1 I was the only person with an underlying health condition and I’m the only one left without support.
"I have to risk my health everyday, hoping I won’t die, just to make enough money to survive.
“Not only the Government but my employer has let me down – stay home and save lives is the motto but I have no option.
"I had been headhunted and offered a new job with another company and, as everyone does, I was happy to progress and move on.
"My resignation letter was in two weeks before lockdown so when it happened I contacted HR and asked what would happen after April 24th – the day I was due to leave.
"They said I would be furloughed until then.
“What I can’t understand is how my resignation is acceptable if everything is shut down.
"How can it be effective? It has been so stressful and upsetting.
"After three years with them, I’m disappointed my work didn’t help me.
"I’m being punished for trying to better my career.
“I believe I should be supported by the furlough and job protection scheme regardless of having handed in my resignation.
"It’s ridiculous. If you’re a tax payer you should not fall through the system.”
A particular gap which has impacted employees from the north-east is where companies are registered overseas and employ people in the UK. Many have been seeking Mr Thomson’s help after finding themselves in this position as a result of the way a company has elected to structure its corporate affairs.
Both case studies below are anonymous to protect the employment of these individuals.
One Gordon constituent contacted Mr Thomson as he works offshore on a zero hours contract as an ROV Pilot Technician but has been left without support due to his employer’s corporate structure.
He said: “After hearing about the governments Job Retention Scheme I was eager to see what my employer had in place; as redundancies rumours were beginning to circulate, due to the affects of COVID-19 on the oil price.
"I was shocked when my employer informed me that as the current scheme stood, I was not eligible as the company had employed me through their foreign office.
“As I pay UK tax and contribute NI, I felt as if I was being left out in the cold by the government.
"Continuing with research I quickly found out it wasn’t just myself but a large majority of the offshore industry that would miss out on support due to their employment contracts.
“The gap in the scheme missing tax paying citizens has caused me a great deal of stress and anxiety due to the uncertainty of job security and knowing I would have no support from the government to cover even the basics such as my mortgage.”
Another constituent got in touch with concerns about the circumstances of her husband, who works as a Senior Tooling Technician on day rate.
He is not eligible for the scheme, again due to the jurisdiction the company he works for is based in.
Speaking about their experience, she said: “For us, it’s the uncertainty that’s worst – companies have decided due to the economy that they won’t use day rate workers but he’s not covered by the Job Retention Scheme or from the company.
“Why is he disadvantaged because the people who employ him are based in Singapore?
"Finding out where the parent company is based isn’t something you consider when you’re applying for a job.
“But the gaps in the scheme have meant we can’t claim Universal Credit as we don’t know where he stands as you can’t claim if you’re still working.
"I feel miffed he doesn’t qualify as he’s fallen through the cracks.
“I don’t see what the difference is – if you pay PAYE you should be eligible for support and HMRC should be able to verify it, it could even be proved with a P60 or National Insurance.”
Mr Thomson added: “There are solutions to these problems which could make the system fully comprehensive by eradicating these gaps.
"I implore the Chancellor to heed to requests to solve these issues so everyone has access to fair support.”
