Potentially massive news has come out of a Treasury Select Committee looking into the government’s coronavirus support schemes.
A Treasury Select Committee is a bipartisan group of MPs whose remit is to examine the expenditure, administration and policy of HM Treasury. This time they were tasked with looking at gaps in the Government’s various coronavirus support schemes.
They highlight many areas including self-employed and director benefits and the full report can be found here.
For the hospitality industry it is the subject of Tronc payments that will be of most interest however. When the Job Retention Scheme (JRS) was first discussed the subject of Tronc payments was an unknown and after much conjecture the government decided not to include it in the calculations.
As our report showed 40% of respondents considered Tronc payments to be a ‘Core Part’ of their income, so having this taken away when furloughed was a massive issue. A fact that hasn’t escaped the Committee, their report has a section on Tronc which states:
‘As well as the five issues we have highlighted above, the Committee has identified the following area where steps should be taken by the Treasury to provide additional support to households. Payments made to employees through a PAYE tronc system—for example employees in the hospitality industry whose tips are collected electronically and included in their pay slips—are not currently considered as wages in an employee’s furloughed pay calculations, despite these payments potentially making up a significant proportion of such employee’s regular reliable income, and being subject to income tax.’
Then they make the following recommendation:
‘The Government must amend the CJRS to allow tronc payments made via PAYE to be included when calculating worker’s pay when assessing entitlement.’
Now it is important to say that this is not a guarantee that the government will make a change regarding this or how it will be calculated and paid if they do. However, the Committee is regarded as being very influential and the government regularly takes its advice on board (saying that they usually fire lying ‘advisors’ who put their own children’s lives at risk whilst flipping off an entire nation as well so…….).
The committee also covered the issue of payment for people who started just before the lockdown was announced and therefore missed out on furlough pay. Suggesting that the government address this to ensure these people, many of whom come from hospitality, are looked after. Saying the government must:
‘….. find a way to extend eligibility criteria to all new starters, suggesting either a further extension of the scheme cut-off date to 31 March; or widening access by accepting alternative forms of evidence that can demonstrate an individual’s employment, such as a signed contract of employment.’
In summary the chair of the Treasury Committee, Mel Stride MP had this to say:
‘The Chancellor has said that he will do whatever it takes to support people and businesses from the economic impact of the pandemic.
Overall, he has acted at impressive scale and pace. However, the Committee has identified well over a million people who – through no fault of their own – have lost livelihoods while being locked down and locked out of the main support programmes.
If it is to be fair and completely fulfil its promise of doing whatever it takes, the Government should urgently enact our recommendations to help those who have fallen through the gaps’
We will keep an eye on this story and let you know as soon as we hear any news as to whether the Committee’s recommendations will be acted on.