More help for the self-employed this time round, PM promises

BORIS JOHNSON has announced a multi-billion pound boost to help the self-employed survive a second lockdown but faced calls to plug the gaps which have left millions without access to additional support.

The Prime Minister yesterday confirmed that the generosity of the threemonth cash grants for the self-employed would be increased from 40 per cent to 55 per cent of average monthly trading profits, capped at £5,160.

The window for claiming the grants was also brought forward by a fortnight to Nov 30 to help firms’ cash flow.

Business leaders had complained of a mismatch between the support for the self-employed and other workers, who under the revived furlough scheme would receive 80 per cent of their pay for the second lockdown.

Mr Johnson also confirmed that business loan schemes due to end on Nov 30 had been extended to the end of January, with small firms able to “top up” existing loans.

However, the Association of Independent Professionals and the SelfEmployed last night said the package still failed to plug gaps in the scheme, which from the outset failed to cover nearly three million freelancers, contractors and newly self-employed.

And Dame Carolyn Fairbairn, the outgoing director general of the CBI, warned businesses were facing a “bleak, bleak midwinter” and that additional support would be needed if lockdown dragged on beyond Dec 2.

She added that while furlough would help meet fixed costs, it would not offset the hit to hospitality firms that relied on Christmas for a third of their takings.

Warning against the spectre of rolling lockdowns, she urged the Government to set out an exit strategy.

It came hours after Rishi Sunak, the Chancellor, attempted to reassure business the lockdown would not stretch into 2021, adding that he expected the tiered system to return on Dec 2.

Writing in The Daily Telegraph, Mr Sunak has acknowledged the latest restrictions are “frustrating and difficult” but insists the Government is “on your side”.

“We will come through this crisis because there is a future worth fighting for,” he writes. “We have helped millions of people to continue to provide for their families.”

He adds: “This week the IMF called our response to the pandemic one of the best examples of coordinated action globally”. And he concludes “The spread of the virus is accelerating faster than we hoped. We will meet this new challenge in the same spirit that has driven our responses from the start – whatever it takes.”

Updating MPS on the latest restrictions, Mr Johnson said he was “truly sorry for the anguish” the restrictions would cause for businesses which had just “got back on their feet”.

He said: “The Government will continue to do everything possible to support jobs and livelihoods in the next four weeks as we have throughout.”

“We protected almost 10 million jobs with furlough and we’re now extending the scheme throughout November.”

He also hinted that the Government would not reinstate rules that would cut benefit payments to self-employed people whose wages were topped up through Universal Credit.

Ministers had been preparing to reinstate a so-called minimum income floor – the MIF – this month, which would have cut their entitlement to the level of minimum wage employees.

Research by the Institute of Fiscal Studies warned that the MIF affected 450,000 households who would lose on average £3,200 a year on the assumption they earn as much as full-time employees on the minimum wage.

Under the original self-employment income support scheme, applicants were given a three-month cash grant worth 80 per cent of their average monthly trading profit, capped at £7,500, followed by a second instalment set at 70 per cent worth up to £6,570.

However, the latest grant was originally set at 40 per cent of monthly profi t s, capped at £ 3,750, creating a potential mismatch between the scheme and the reinstated furlough.

The changes would see the grants raised to 80 per cent of profits for November – or 55 per cent over three months – bringing it in line with a month’s worth of furlough and two months of the less generous job support scheme, which resumes after lockdown.

The i ncrease means t he s el f - employed will receive £4.5 billion over the next three months.

Adam Marshall, director general of the British Chambers of Commerce, said it would “provide relief to many” but should have been announced at the same time as the furlough extension.

He urged Mr Sunak to consider extending support beyond November due to the “difficult winter ahead”.

Dame Carolyn said: “We know economic damage is unavoidable. There’s no point being pollyannish about this, but we need to minimise it.”

‘We protected almost 10 million jobs with furlough and we’re now extending the scheme throughout November’

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