Ministers are facing growing pressure to do more to support the millions of self-employed workers affected by the coronavirus outbreak.
On Friday Chancellor Rishi Sunak’s announced plans to underwrite the wages of workers who face being laid off as a result of the virus.
But many have pointed out that there is little support on offer for freelancers, contractors and the self-employed whose incomes have taken a hit due to the coronavirus outbreak.
With the government pledging to pay up to 80% of the wages of employees, up to £2,500 a month, if firms agreed to keep them on, many have pointed out that currently self employed workers are only entitled to claim Universal Credit at £94 a week - the equivalent of around £4,800 a year.
Can this be right? Someone on £30k a year gets a £24k salary from the government during the #CoronaCrisis.— Jeremy Vine (@theJeremyVine) March 20, 2020
But a #selfemployed person gets just £94 a week, which would be £4,800 a year. pic.twitter.com/HYFR8sWE5h
Former Conservative cabinet minister David Davis said the economy could suffer a near “fatal seizure” if such people aren’t protected.
He told the BBC: “It is absolutely necessary. Without this the whole of the British economy will have a seizure – almost a fatal seizure in economic terms.
“It is great for those who have got jobs but it does miss out a pretty important sector of the economy – namely the self-employed – and he (Mr Sunak) is going to have to find a way of replicating this for the self-employed as well.”
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His call was backed by TUC general secretary Frances O’Grady who said the trade union movement would be “pushing really hard” on the issue.
“We have got members in industries from construction to the creative industries and this will cause real hardship unless we get to grips with it,” she told the BBC Radio 4 Today programme.
Government assistance for employed people during #COVID19 is up to £2,500 per month. For the self-employed, it is £376 per month.— David Lammy (@DavidLammy) March 21, 2020
There are 5 million self-employed people in the UK. @BorisJohnson, @RishiSunak - please announce measures to help them now.
However, Treasury Chief Secretary Stephen Barclay said ministers were concentrating on measures which could be rolled out quickly to keep the economy going.
He said the self-employed were being helped through measures such as the deferral of self-assessment tax requirements, payment holidays for mortgage payers and the strengthening of the welfare “safety net” and the issue was about “operationally what is difficult to do and what can be delivered to the timescales were are working to”.
“We are looking at operationally what we can roll out to people,” he told Today.
“The main thing we have done is twofold: it is to support the economy as a whole because the best thing for people who are self-employed, as for all people, is to sustain the economy and ensure that we can return with those viable businesses, and alongside that strengthen the safety net.
“So we have increased the allowance on Universal Credit, we have made it available from day one, we have removed the minimum income floor so if people who are self-employed are working less than 35 hours in a week they are not penalised within the benefits system.”
Dear @BorisJohnson, the self-employed freelance community contributed £271bn to the UK economy in 2017 - enough to fund the NHS twice over (via @teamIPSE). And that stat has grown since. Don't forget about us (4.8 million self-employed in the UK). Please RT.— Emma Gannon (@emmagannon) March 20, 2020
Paul Johnson, the director of the Institute for Fiscal Studies think tank, predicted further measures would come forward from government.
“This clearly is a gap. He is not able at the moment to replace the normal wages or incomes of the self-employed,” he told Today.
“I am sure that the Chancellor will come back with something more for this group. I am sure that the reason he hasn’t done that is because it is a much more complicated thing to achieve. I think it is right that he doesn’t try to do that too quickly.”