The Chancellor of the Exchequer, Rishi Sunak, has said the Government is working on a COVID-19 support package for the self-employed, with a proposed amendment to the Coronavirus Bill indicating its potential details.
After facing criticism from self-employment experts and lobbying bodies, the Government has been urged to match the support it has promised employees, who will receive 80% of their salary up to £2,500 as businesses contend with the COVID-19 crisis. A tabled amendment to the Coronavirus Bill suggests self-employed workers could receive something similar, and states: “The scheme must make provision for payments to be made out of public funds to individuals who are (a) self-employed or (b) freelancers.” It then reveals details for plans to offer self-employed workers 80% of the individual’s monthly net earnings, averaged over the last three years, or £2,917 per month – whichever is lower.
In the House of Commons, Mr Sunak didn’t confirm this or commit to a specific date upon which the Government would reveal its plans to help the UK’s 5m self-employed workers, but said it is “something that we have been looking at in intense detail over the past week.” The Chancellor also said he has “been in dialogue with all the key stakeholder groups” and “rest assured” the Government “absolutely understand the situation that many self-employed people face at the moment.”
The news will be welcomed by the likes of IPSE, that recently condemned the Chancellor for leaving the self-employed “trailing far behind.” Director of Policy, Andy Chamberlain, said: “The Government has done nowhere near enough to support the self-employed. In fact, instead of supporting freelancers to help them keep their businesses going, it is pushing the self-employed into the benefits system. Worse, in the benefits system, the amount of money available will simply not be enough to cover many freelancers’ costs.”
Chamberlain wants the “Prime Minister and Chancellor to match the steps they have taken for employees and create a Temporary Income Protection Fund for the self-employed. This should give a temporary, targeted cash injection to the freelance businesses that are struggling most – a financial boost to make up for lost income and keep them afloat.”
IPSE has also started a petition, which has gained support from Stephen Fry and author, Philip Pullman. It has over 130,000 signatures.
These calls come at a time when new research has shown the damaging effects COVID-19 is having on contractor hiring. Staffing association, APSCo, said placements have “fallen off a cliff”, with 90% of recruiters stating that up to 50% of contractors on placement have already been terminated. According to the majority of recruiters, things don’t look much better for contractors who are still working, despite them having received the positive news last week that IR35 reform will be delayed. Around three quarters (76%) of recruitment consultants told APSCo they believe up to 50% of contractors will have their engagements brought to an end by 29th March.
APSCo’s Chief Executive, Ann Swain, shared a similar view to IPSE. While welcoming the VAT deferral announcement, which will help cash flow for contractors and recruiters, Swain said she was “concerned” about the “thousands of self-employed and freelance contractors who have had their assignments terminated and who will not be protected and who, it seems, will have to rely on the benefits system.”