There are many SME businesses which, in order to produce goods/provide services, need their employees to perform a series of tasks. As a consequence, there is little or no scope to reduce the workflow and employees cannot be laid off. It is however possible to have the same people working reduced hours. This would effectively, and to all intents and purposes, be equivalent to laying people off and help to reduce costs. The government support provided within the COVID-19 measures, do not currently cater for these situations.
Adding to this, while workers in paid employment have been guaranteed by Government 80 per cent of wages, it is unfair that the self-employed are not supported in the battle against COVID-19.
Beavis Morgan has therefore written to Alex Chisholm, Secretary of HM Treasury’s Department for Business, Energy and Industrial Strategy, and our local MP, Emily Thornberry, delivering the following message:
Support for businesses through the Coronavirus Job Retention Scheme
As advisers to many UK-based businesses we welcome the government’s proposed support for employers to continue paying employees who would otherwise be laid off. As the criteria for support are being established, we encourage government to also consider the situation of businesses which could not lay-off one or a few employees without making it impossible to continue delivering the product or service that they supply, but who are facing significantly reduced demand and therefore need to ask all their staff to work reduced hours, or go out of business all-together. This is a particular issue for smaller companies, which nonetheless play a crucial roles in the supply chains of large organisations.
We also act for many self-employed individuals, and urge the government to extend a comparable support package to these workers who will otherwise be left relying on Universal Credit which for many will result in financial destitution, or run the risk of breaching the lockdown regime in order to maintain an income on which they can live.
Peter Drown
Senior Partner, Beavis Morgan LLP