WORKERS GOT TO WAIT
MILLIONS of self-employed workers were finally thrown a £9billion coronavirus lifeline last night – but they face an agonising two-month wait for the bailout scheme to start.
Chancellor Rishi Sunak unveiled the Government’s plan to steer sole-traders through the crisis.
Some 3.9 million grafters – including hairdressers, taxi drivers and plumbers – will get 80% of their average monthly profits for three months, capped at £2,500 – mirroring support for employees.
Speaking from No10, Mr Sunak told Britain’s army of self-employed workers: “You haven’t been forgotten, we will not leave you behind, we are all in this together.”
But the Self-Employed Income Support Scheme won’t kick in until June, forcing desperate families on to Universal Credit until then.
The Chancellor also hinted at ending tax breaks for the selfemployed when the pandemic is over as payback for the support.
Shadow Chancellor John McDonnell said he was “relieved” but added: “My worry is that if people cannot get access to the scheme until June it will simply be too late for millions.
“People need support in the coming days. Asking people to rely on Universal Credit when more than 130,000 are queuing online will be worrying to many people, so there is a real risk that without support until June the self-employed will feel they have to keep working, putting their own and others’ health at risk.” Announcing the measures, Mr Sunak said: “Self-employed people are a crucial part of the UK’s workforce who have understandably been looking for reassurance and support during this national emergency. The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far.
“It targets support to those who need help most, offering the self-employed the same level of support as those in work.”
But those who have set up businesses recently will not be eligible because they will have filed no records with HMRC after officials excluded them to limit fraud.
And workers who made profits of £50,000 or more are not eligible and are expected to rely on savings. Mr Sunak also hinted at a future tax raid on the self-employed. Officials have long wanted to bring national insurance contributions for the self-employed into line with workers on the PAYE system.
The Chancellor said: “There’s currently an inconsistency in contributions between selfemployed and employed – and the actions taken today, treating them the same way as those who are employed – it does throw into light
the question of consistency and whether that is fair to everybody going forward. Especially as when we get through this and are chipping in together to right the ship, making sure everyone is doing their bit as well.”
The scheme covers 95% of people who receive the majority of their income from self-employment. Those eligible will be contacted and people were urged not to contact the HMRC.
While the Chancellor’s announcement was widely praised, campaigners warned that many self-employed workers could not wait two months. Acting Lib Dem leader Sir Ed Davey said: “Many sole-traders like taxi drivers, hairdressers and cleaners will not be able to wait until June.
“I also worry about people who have been self-employed for less than a year who seem to be forgotten by this scheme. Many will have risked their savings to get started and it looks like they’ll get nothing from the package.”
Money Advice Trust chief executive Joanna Elson said: “Having to wait until June for payments to come
through will cause real hardship for many. The Government should introduce a dedicated hardship fund for self-employed people who are struggling in the meantime.
“The electricians, plumbers and taxi drivers we are hearing from, who cannot work from home, are losing money by the hour. Telling them that they can try and access Universal Credit is not enough.”
Meanwhile, experts said the economic shock triggered by coronavirus could plunge the UK into a steeper recession than during the 2008-09 financial crash.
Analysts predict double-digit falls in GDP that would dwarf the 6% decline seen more than a decade ago.
Samuel Tombs, of Pantheon Macroeconomics, said: “In normal recessions, many businesses report small incremental declines in output. By contrast, many firms are now likely to be reporting huge declines.”