Now is the time to use our public social security system to keep each other safe and prevent people being pulled under by the impacts of Covid-19.
All over the country, families, friends, neighbours and communities are working together to support each other through the unprecedented situation created by the Coronavirus pandemic. We’re seeing our shared values in action: compassionate responses to people who are ill and self-isolating; agreement on the need for just measures to make sure that those most at risk from these ever-moving currents, and with fewest resources, get the right help.
The Government has rightly taken major steps in recent days to help businesses stay afloat and preserve jobs and services. They have started to take action to support individuals and families. Ensuring that nobody will be evicted from their home in the next three months, and faster access to sick pay are important steps. The Government is doing the right thing by promising more action to support individuals, but this must be fast, and the way that people access these services must work for them if they are to be effective. We must act together to keep each other safe, using the social security system we already have as an anchor to steady us when times are tough.
We believe the Government must focus on three goals:
- Getting the right support to people when they are sick, self-isolating, and for those locked in poverty who are hemmed in by rising costs, falling earnings and fewer opportunities to get work or increase their hours.
- Provide security by helping people stay in work.
- Make sure people can meet housing costs and stay in their homes.
To achieve these, we recommend the following temporary measures:
1. A strong anchor for people off sick, self-isolating or struggling to make ends meet
For those who are sick or self-isolating:
- Provide statutory sick pay to all employees by removing the current weekly earnings threshold to make it available to almost 2 million workers earning under £118 per week. Estimated cost: £95 million per week for each 100,000 newly-eligible workers who need to receive it.
- Increase the amount people receive from Statutory Sick Pay from £94.25 per week to two thirds of earnings, up to a maximum of £219 per week. This maximum is equivalent to two thirds of a full-time wage at the National Living Wage.
- For workers who don’t have access to Statutory Sick Pay through their employer, give them access to contributory Employment and Support Allowance, even if someone has not built up the national insurance contributions usually required.
For people struggling to make ends meet, hemmed in by rising costs, caring responsibilities and fewer opportunities to earn enough to live on:
- Suspending all deductions from benefits for at least six months. That should include payments for debts to the government, councils and utility companies and all financial sanctions.
- This should include all Universal Credit (UC) advances, meaning that new claimants can get through the current minimum five-week wait for their first UC payment by accessing an advance payment with no immediate requirement to pay it back.
- Temporarily increase the amount of support available through Universal Credit, Jobseekers Allowance, Employment and Support Allowance and Income Support; the standard allowance for all of those should rise from £74.35 to £150 per week for a single person, and from £116.80 to £260 for a couple (with a similar proportional increase in the young person rate). Estimated cost: £5 billion over three months; £20 billion over a year.
- Temporarily increase the child element of Universal Credit and Child Tax Credit by £12 per week per eligible child to help families pay for extra meals for their children. The Government has promised to replace free school meals with vouchers, but families need this support to be as fast, simple and flexible as possible, especially given the difficulty of finding essential items in some shops. Estimated cost: £900 million over three months; £3.5 billion over a year.
- Strengthen the support for self-employed people in Universal Credit by temporarily removing the ‘Minimum Income Floor’ rule. This rule has the effect of reducing the amount of help available if self-employed earnings fall below a certain level. The Government has already done this for those who have Coronavirus or are self-isolating. But many more will struggle to stay afloat because of wider impacts of public health measures, and recommendations which reduce demand for their services, or make it difficult to keep delivering goods or services to customers.
2. Keep people in work
It’s vital and just that we keep as many people in jobs as possible, for individuals’ security and so that businesses and the economy can bounce back quickly after this crisis ends. The Government has already taken steps to help businesses stay afloat through the next few months, but more is needed to help employers retain their workers and support them if they need to stay at home to care for dependents.
- The Government should commit to helping businesses to cover a proportion of workers' wages for workers who have to take time off work to care for school-age or younger children during school and nursery closures. Also, in firms that are seeing a temporary fall in their revenues, and so would otherwise make redundancies or cut back on worker hours.
- It is right for the Government to discuss rates with employers and trade unions, but we recommend as a minimum this is set at the same level as the increased value of statutory sick pay and the Government directly reimburses businesses for 75% of the cost.
- We have mechanisms to do this through either statutory sick pay or statutory maternity pay as these both reimburse employers for absence.
3. Help with housing costs and security at home
The Government and banks have taken very welcome action to suspend mortgage payments for homeowners and protect renters from eviction for three months. These create a necessary breathing space for those families. However, we must go further.
- At the moment, homeowners must wait nine months before they can access support to help pay their mortgage interest. The Government should look to reduce that waiting time so that homeowners on low incomes can get help immediately after the three-month mortgage holiday.
- For renters, we must prevent rent arrears building up, otherwise many may be pulled under as they are hit with a wave of unaffordable payments after the three-month period is finished. To prevent this, the Government should temporarily increase local housing allowance so that it covers median rents in local areas.
We urge the Government to keep up their fast action and put these measures in place immediately. We must free people who are already struggling to get by from the fear, anxiety and restrictions imposed by poverty in these uncertain times.